EMPRESA DE TRANSPORTE DE PASAJEROS METRO S · 2020. 8. 31. · Empresa de Transporte de Pasajeros...

Empresa de Transporte de Pasajeros Metro S.A. and Subsidiaries

Interim Consolidated Financial Statements

As of and for the periods ended

March 31, 2020 and 2019 and December 31, 2019

EMPRESA DE TRANSPORTE DE PASAJEROS METRO S.A. AND SUBSIDIARIES

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of and for the periods ended

March 31, 2020 and 2019 and December 31, 2019

Contents:

Interim Consolidated Statements of Financial Position

Interim Consolidated Statements of Comprehensive Income by Function

Interim Consolidated Statements of Changes in Equity

Interim Consolidated Statements of Cash Flows

Notes to the Interim Consolidated Financial Statements

ThCh$ Figures expressed in thousands of Chilean Pesos

MCh$ Figures expressed in millions of Chilean Pesos

US$ Figures expressed in United States dollars

ThUS$ Figures expressed in thousands of United States dollars

MUS$ Figures expressed in millions of United States dollars

ThUF Figures expressed in thousands of Unidades de Fomento (inflation-adjusted units)

Ch$ Figures expressed in Chilean pesos

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

C O N T E N T S

Interim Consolidated Statements of Financial Position ........................................................................... 5

Interim Consolidated Statements of Comprehensive Income by Function ............................................ 7

Interim Consolidated Statements of Changes in Equity ......................................................................... 9

Interim Consolidated Statements of Cash Flows ................................................................................... 10

Note 1. Company Profile .................................................................................................................. 11

Note 2. Summary of significant accounting policies ......................................................................... 11

2.1 Basis of preparation ................................................................................................... 11

2.2 Basis of consolidation ................................................................................................ 12

2.3 Foreign currency transactions ..................................................................................... 14

2.3.1 Functional and presentation currency .............................................................. 14

2.3.2 Transactions and balances in foreign currency and indexation units .............. 14

2.3.3 Foreign currency translations .......................................................................... 15

2.4 Property, plant and equipment .................................................................................... 15

2.5 Investment property ..................................................................................................... 16

2.6 Intangible assets other than goodwill .......................................................................... 17

2.6.1 Easements ....................................................................................................... 17

2.6.2 Computer software ........................................................................................... 17

2.7 Finance income and expenses ................................................................................... 17

2.8 Losses due to impairment of non-financial assets ...................................................... 18

2.9 Financial assets .......................................................................................................... 18

2.9.1 Financial assets at amortized cost .................................................................... 18

2.9.2 Financial assets at fair value through other comprehensive income ................ 19

2.9.3 Financial assets at fair value through profit or loss .......................................... 19

2.10 Inventories ................................................................................................................... 19

2.11 Trade and other receivables ....................................................................................... 19

2.12 Cash and cash equivalents ......................................................................................... 20

2.13 Share capital ............................................................................................................... 20

2.14 Trade and other payables ........................................................................................... 20

2.15 Financial liabilities ....................................................................................................... 20

2.16 Income tax and deferred taxes.................................................................................... 22

2.17 Employee benefits ....................................................................................................... 23

2.17.1 Accrued vacations ......................................................................................... 23

2.17.2 Severance indemnity payments .................................................................... 23

2.17.3 Incentive and recognition bonuses ............................................................... 23

2.18 Provisions .................................................................................................................... 24

2.19 Classification of balances (current and non-current) .................................................. 24

2.20 Revenue and expense recognition ............................................................................. 24

2.21 Lease agreements .................................................................................................... 25

2.22 New IFRS and interpretations issued by the IFRS

Interpretations Committee (IFRIC) ....................................................................................... 26

Note 3. Management estimates and accounting criteria .................................................................. 27

3.1 Severance indemnity payments .................................................................................. 28

3.2 Useful life of property, plant and equipment ............................................................... 28

3.3 Litigation and other contingencies .............................................................................. 28

3.4 Measurements and/or valuations at fair value ............................................................ 28

Note 4. Cash and cash equivalents ................................................................................................. 32

Note 5. Trade and other receivables, current .................................................................................. 34

Note 6. Inventories .......................................................................................................................... 35

Note 7. Intangible assets other than goodwill .................................................................................. 36

Note 8. Property, plant and equipment ............................................................................................ 37

Note 9. Investment property .......................................................................................................... 42

Note 10. Other financial assets, current and non-current.................................................................. 44

Note 11. Other non-financial assets, current and non-current .......................................................... 47

Note 12. Other financial liabilities, current and non-current .............................................................. 47

Note 13. Other non-financial liabilities, current and non-current ....................................................... 54

Note 14. Balances and transactions with related entities .................................................................. 55

Note 15. Trade and other payables ................................................................................................... 56

Note 16. Segment information ........................................................................................................... 57

Note 17. Employee benefits .............................................................................................................. 57

Note 18. Income tax .......................................................................................................................... 60

Note 19. Provisions, contingencies and guarantees ......................................................................... 61

Note 20. Changes in equity ............................................................................................................... 62

Note 21. Income and expenses ......................................................................................................... 65

Note 22. Third party guarantees ........................................................................................................ 70

Note 23. Risk management policies .................................................................................................. 71

23.1 Description of the market in which the Company operates ....................................... 71

23.2 Financial risks ............................................................................................................ 72

23.3 Capital risk management ........................................................................................... 79

23.4 Commodities risk ........................................................................................................ 80

Note 24. Environment ........................................................................................................................ 81

Note 25. Sanctions ............................................................................................................................ 81

Note 26. Subsequent events ............................................................................................................. 81

5

Interim Consolidated Statements of Financial Position

As of March 31, 2020 and as of December 31, 2019

(In thousands of Chilean pesos)

CURRENT ASSETS

Cash and cash equivalents 4 71,102,948 106,503,269

Other current financial assets 10 118,800,631 156,487,558

Other current non-financial assets 11 8,642,395 9,853,393

Trade and other receivables current 5 16,030,051 16,090,004

Current inventories 6 19,095,786 17,430,294

Current tax assets 1,435,974 1,221,974

Total current assets 235,107,785 307,586,492

NON-CURRENT ASSETS

Other non-current financial assets 10 98,359,510 61,608,881

Other non-financial assets, non-current 11 33,290,789 31,403,969

Accounts receivable, non-current 1,521,632 1,578,060

Intangible assets other than goodwill 7 8,192,820 8,376,304

Property, plant and equipment 8 4,894,621,571 4,867,401,435

Investment property 9 25,260,427 25,342,044

Total non-current assets 5,061,246,749 4,995,710,693

TOTAL ASSETS 5,296,354,534 5,303,297,185

ASSETS NOTE 03-31-2020 12-31-2019

The accompanying notes are an integral part of these interim consolidated financial statements.

6

Interim Consolidated Statements of Financial Position, continued

As of March 31, 2020 and as of December 31, 2019


LIABILITIES

CURRENT LIABILITIES

Other current financial liabilities 12 151,401,410 153,979,573

Trade and other payables 15 120,803,389 112,512,046

Other short-term provisions 19 408,682 623,810

Employee benefits, current 17 7,920,797 14,473,391

Other current non-financial liabilities 13 18,358,094 14,500,340

Total current liabilities 298,892,372 296,089,160

NON-CURRENT LIABILITIES

Other financial liabilities, non-current 12 2,223,220,744 2,072,205,775

Non-current accounts payable 15 1,364,539 1,424,782

Due to related companies, non-current 14 42,515,130 22,515,130

Employee benefits, non-current 17 13,251,204 13,087,241

Other non-financial liabilities, non-current 13 49,302,099 49,763,434

Total non-current liabilities 2,329,653,716 2,158,996,362

Total liabilities 2,628,546,088 2,455,085,522

Share capital 20 3,712,166,008 3,712,166,008

Accumulated deficit 20 (1,079,035,880) (886,493,888)

Other reserves 20 34,688,963 22,550,188

Equity attributable to owners of parent 2,667,819,091 2,848,222,308

Non-controlling interests 20 (10,645) (10,645)

Total equity 2,667,808,446 2,848,211,663

Total equity and liabilities 5,296,354,534 5,303,297,185

EQUITY

EQUITY AND LIABILITIES NOTE 03-31-2020 12-31-2019


7

Interim Consolidated Statements of Comprehensive Income by Function

For the periods of three months ended as of March 31, 2020 and 2019


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

BY FUNCTION NOTE01-01-2020 01-01-2019

PROFIT (LOSS) 03-31-2020 03-31-2019

Revenue 21 76,475,392 100,218,814

Cost of sales 21 (96,288,825) (92,923,425)

Gross profit (19,813,433) 7,295,389

Other income by function 21 2,324,863 13,534,644

Administrative expenses 21 (8,604,002) (8,891,393)

Other expenses by function 21 (1,054,128) (534,750)

Other income (expenses) 21 (1,262,187) 20,250

Finance income 21 2,727,408 2,863,501

Finance costs 21 (21,943,505) (20,122,026)

Foreign currency translation differences 21 (135,279,928) 22,488,857

Loss from inflation-adjusted units 21 (9,637,080) (693,449)

Profit (loss) before taxes (192,541,992) 15,961,023

Income tax expense

Profit (loss) from continued operations (192,541,992) 15,961,023

Profit (loss) from discontinued operations

Income (loss) (192,541,992) 15,961,023

PROFIT (LOSS) ATTRIBUTABLE TO:

Owners of parent (192,541,992) 15,961,023

Non-controlling interests - -

Net income (loss) (192,541,992) 15,961,023


8

Interim Consolidated Statements of Comprehensive Income by Function, continued



01-01-2020 01-01-2019

03-31-2020 03-31-2019

Net income (loss) (192,541,992) 15,961,023

Other comprehensive income, before taxes, income (loss) from new

measurements of defined benefit plans 21 (42,556) (95,784)

Total other comprehensive income that will not be reclassified to

profit or loss for the period, before taxes 21 (42,556) (95,784)

Components of other comprehensive income that will be reclassified

to profit or loss for the period, before taxes - -

Income (loss) from exchange rate differences, before taxes - -

Profit (loss) on cash flow hedges, before taxes 21 12,181,331 (1,205,094)

Total other comprehensive (loss) income that will be reclassified to

profit or loss for the period, before taxes 21 12,181,331 (1,205,094)

Other components from other comprehensive income, before taxes 21 12,138,775 (1,300,878)

Income taxes related to components of other comprehensive income

that will be reclassified to profit or loss for the period - -

Total other comprehensive (loss) income 21 12,138,775 (1,300,878)

Total comprehensive (loss) income (180,403,217) 14,660,145

STATEMENTS OF COMPREHENSIVE INCOME NOTE


9

Interim Consolidated Statements of Changes in Net Equity



Items

Other reserves

Retained earnings

(accumulated deficit)

Equity attributable to

owners of parent

Non-controlling interests

Total net equity Share capital

Other sundry

reserves

Revaluation surplus

Cash flow hedges

Reserves for

actuarial gain (loss) on defined

benefit plans

Total Other Reserves

Opening balance 01-01-2020 3,712,166,008 30,336,377 3,042,584 (10,228,760) (600,013) 22,550,188 (886,493,888) 2,848,222,308 (10,645) 2,848,211,663

Loss - - - - - - (192,541,992) (192,541,992) - (192,541,992)

Other comprehensive income - - - 12,181,331 (42,556) 12,138,775 - 12,138,775 - 12,138,775

Comprehensive income - - - 12,181,331 (42,556) 12,138,775 (192,541,992) (180,403,217) - (180,403,217)

Closing balance 03-31-2020 3,712,166,008 30,336,377 3,042,584 1,952,571 (642,569) 34,688,963 (1,079,035,880) 2,667,819,091 (10,645) 2,667,808,446

Opening balance 01-01-2019 3,455,533,978 30,336,377 3,042,584 - - 33,378,961 (690,995,637) 2,797,917,302 (10,645) 2,797,906,657

Income - - - - - - 15,961,023 15,961,023 - 15,961,023

Other comprehensive income - - - (1,205,094) (95,784) (1,300,878) - (1,300,878) - (1,300,878)

Comprehensive income - - - (1,205,094) (95,784) (1,300,878) 15,961,023 14,660,145 - 14,660,145

Increase (decrease) through transfers and other changes - - - - 95,784 95,784 (95,784) - - -

Closing balance 03-31-2019 3,455,533,978 30,336,377 3,042,584 (1,205,094) - 32,173,867 (675,130,398) 2,812,577,447 (10,645) 2,812,566,802


10

Interim Consolidated Statements of Cash Flows

For the periods of three months ended March 31, 2020 and 2019


Consolidated Statements of Cash Flows (direct method) 01-01-2020 01-01-2019

03-31-2020 03-31-2019

Net cash flows provided by (used in) operating activities

Collection from sales of assets and service renderings 70,242,525 96,590,196

Other collections for operating activities 4,267,094 15,643,536

Payments to suppliers for the provision of goods and services (48,938,591) (48,516,844)

Payments to, and on behalf of, employees (25,816,623) (26,312,021)

Other payments for operating activities (2,190,080) (1,814,767)

Net cash flows provided by (used in) operating activities (2,435,675) 35,590,100

Cash flows provided by (used in) investing activities

Purchases of property, plant and equipment (43,556,527) (79,001,133)

Other collections to acquire equity or debt instruments of other entities 115,847,441 101,390,562

Other payments to acquire equity or debt instruments of other entities (75,779,650) (99,112,220)

Interest paid (5,482,052) (11,147,593)

Net cash flows used in investing activities (8,970,788) (87,870,384)

Net cash flows provided by (used in) financing activities

Loans from related entities - Contribution from the Chilean Treasury 20,000,000 17,309

Amounts from long-term loans - 12,026,709

Other collections of cash 10,432,603 422,720

Repayment of loans (18,142,796) (16,595,538)

Interest paid (33,149,622) (20,399,066)

Other cash outflows (4,579,352) (335,808)

Net cash flows provided by (used in) financing activities (25,439,167) (24,863,674)

Net increase (decrease) in cash and cash equivalents before effect of changes in the exchange rate

(36,845,630) (77,143,958)

Effects of variations in the exchange rate on cash and cash equivalents 1,445,309 (247,296)

Net (decrease) increase in cash and cash equivalents (35,400,321) (77,391,254)

Cash and cash equivalents at the beginning of the period 106,503,269 165,110,682

Cash and cash equivalents at the end of the period 71,102,948 87,719,428


11

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIODS ENDED MARCH 31, 2020 AND 2019 AND DECEMBER 31, 2019


1. Company Profile

Empresa de Transporte de Pasajeros Metro S.A., (hereinafter also referred to as the

Company) is a Chilean state-owned company created by Law 18,772 on January 28, 1989 as

the legal successor to the Dirección General de Metro, as a result of which all the assets and

liabilities of the latter were transferred to the Company.

The Company is a stock corporation bound by the principles applicable to open stock

corporations, and has its registered office at 1414 Avenida Libertador Bernardo O’Higgins,

Santiago, Chile.

The Company is registered on the Register of Securities under number 421 and is subject to

the supervision of the Financial Market Commission (referred to as CMF).

The Company’s corporate purpose is to carry out all the activities associated with passenger

transportation in metropolitan railways or other complementary electrical vehicles, and the

provision of ground transportation services by buses or vehicles of any technology, as well as

activities related to such line of business.

These Consolidated Financial Statements are presented in thousands of Chilean pesos

(unless expressly stated otherwise) since this is the functional currency of the primary

economic environment in which the Company operates.

2. Summary of significant accounting policies

The main accounting policies adopted in preparing these Interim Consolidated Financial

Statements, as required by IAS 1, are based on International Financial Reporting Standards

(hereinafter "IFRS") (with the exception of the application of International Public Sector

Accounting Standard 21 as discussed in the following paragraph) in effect as of March 31,

2020, and have been applied on a consistent basis to all accounting periods presented in the

Interim Consolidated Financial Statements.

2.1. Basis of preparation

The Interim Consolidated Financial Statements comprise the Interim Consolidated

Statement of Financial Position as of March 31, 2020 and as of December 31, 2019; the

Interim Consolidated Statements of Comprehensive Income for the periods of three

months ended March 31, 2020 and 2019 and the Interim Consolidated Statements of

Changes in Equity and the Interim Consolidated Statements of Cash Flows for the periods

of three months then ended, prepared in accordance with the standards and instructions

issued by the Financial Market Commission. These standards and instructions require the

Company to comply with the International Financial Reporting Standards (IFRS), and also

with IAS 34 "Interim Financial Reporting", as issued by the International Accounting

Standards Board (IASB)), except for certain IFRS standards as follows: through Ruling

No. 6158 dated March 5, 2012, the Company was authorized by the Financial Market

Commission to exceptionally apply International Public Sector Accounting Standard 21

(hereinafter "IPSAS 21"), instead of IAS 36. Please see Note 2.8 for further details

regarding this exception.

12


The Management of the Company is responsible for the information contained in these

Interim Consolidated Financial Statements, which have been approved by the Board of

Directors on May 25, 2020, with the Management being authorized to publish them.

The Interim Consolidated Financial Statements have been prepared on the basis of

historical cost. In general, the historical cost is based on the fair value of the consideration

given in exchange for the goods and services. Fair value is the price that would be

received for selling an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date, regardless of whether this price is

observable or estimated using another valuation technique. The Company considers the

characteristics of the assets and liabilities if the market participants take those

characteristics into consideration at the time of fixing the price of the asset or liability at

the measurement date.

The preparation of these Interim Consolidated Financial Statements, in accordance with

IFRS, requires the use of certain critical accounting estimates, necessary for the

quantification of certain assets, liabilities, income and expenses.

It also requires management to exercise its judgment in the process of applying the

Company’s accounting policies. The areas involving a higher degree of judgment or

complexity, or areas where assumptions and estimates are significant to the consolidated

financial statements are disclosed in Note 3 "Management's Estimates and Accounting

Criteria.”

2.2. Basis of consolidation

The Interim Consolidated Financial Statements include the financial statements of the

Parent Company and of the entities controlled by the Company. Control is achieved when

the Company has:

Power over the investee.

Exposure, or rights, to variable returns from involvement with the investee.

The ability to use power over the investee to affect the amount of those returns.

The Company evaluated control based on all facts and circumstances and the conclusion

is re-evaluated if there is an indication that a change has occurred in at least one of the

three conditions detailed above.

Empresa de Transporte Suburbano de Pasajeros S.A. (Transub S.A.), Sociedad Metro

SpA and Sociedad Metro Emisora de Medios de Pago S.A. (MetroPago S.A.) are

consolidated from the date on which control of these entities was transferred to the

Company. Consolidation includes the financial statements of the Parent company and its

subsidiaries, which comprises all assets, liabilities, income, expenses and cash flows of

the subsidiaries, once adjustments and eliminations for intra-group transactions have

been made.

13


The non-controlling interest in the consolidated subsidiaries is presented under

shareholders' equity, in “Non-controlling interests,” in the Interim Consolidated Statement

of Financial Position and in “Income (loss) attributable to non-controlling interest” in the

Interim Consolidated Statements of Comprehensive Income.

Empresa de Transporte Suburbano de Pasajeros S.A. is in an organization and start-up

period, has not yet registered any activity since its inception to the present date and was

consolidated under the instructions of General Ruling No.1819 issued by the Financial

Market Commission on November 14, 2006.

On April 26, 2019, the Company “Metro Emisora de Medios de Pago S.A” (MetroPago

S.A.) was incorporated by means of a public deed, under Taxpayer ID Number

77,057,498-6 and governed by the regulations of the Chilean Corporations Act.

On May 30, 2019, the Superintendency of Banks and Financial Institutions authorized the

existence of MetroPago S.A. as a special corporation, in accordance with Title XIII of Act

No. 18,046 (the Chilean Corporations Act). The extract of the deed of incorporation of this

company was registered on page 57735, under No. 28465, of the Registry of Commerce

for the year 2019 of the Santiago Real Estate Registrar. Also, the extract of the deed of

incorporation was published in the Official Gazette on July 26, 2019.

The Company's sole purpose is to issue its own payment cards with provision of funds

under the terms authorized by Act No. 20,950 and the other regulations governing the

issuance of payment cards with provision of funds. In addition, this company may perform

activities supplementary to the performance of its line of business. These activities must

be authorized by the Superintendency of Banks and Financial Institutions or the agency

that succeeds or replaces it.

This company is in an organization and start-up stage, since it requires authorization from

the Financial Market Commission (FMC) for registration in the FMC’s Single Register of

Payment Cards Issuers.

The financial statements of Metro Pago S.A. are prepared in accordance with accounting

standards and instructions issued by the Financial Market Commission because due to

the nature of its business, this company is regulated and supervised by both those

regulatory agencies. As a result, the financial statements of this subsidiary were prepared

on a comprehensive basis that considers accounting bases other than those applied by

Metro S.A. However, due to the stage the subsidiary is in, there were no significant

differences between such.other comprehensive basis and the framework under which the

Company and its other subsidiaries report. The participation percentages in the entities

which are consolidated by the Company are as follows:

14

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIODS

ENDED MARCH 31, 2020 AND 2019 AND DECEMBER 31, 2019

Ownership percentage

Tax ID No. : Company name 03-31-2020 12-31-2019

Direct Indirect Total Direct Indirect Total

96.850.680-3 Transub S.A. 66.66 - 66.66 66.66 - 66.66

76.920.952-2 Metro SpA. 100.00 - 100.00 100.00 - 100.00

77.057.498-6 MetroPago S.A. 99.00 1.00 100.00 99.00 1.00 100.00

The ownership in these subsidiaries is not subject to joint control.

The Company does not have ownership interests in joint ventures or in associates.

Non-controlling interests - Non-controlling interests in the Interim Consolidated Statement

of Financial Position are presented, within equity, separately from the equity of the owners

of the parent company.

2.3. Foreign currency transactions

2.3.1. Functional and presentation currency

Items included in the Interim Consolidated Financial Statements are measured

using the currency of the primary economic environment in which the reporting

entity operates (the “functional currency”). The Company's functional currency is

the Chilean peso.All information is presented in thousands of Chilean pesos

(ThCh$) rounded to the nearest unit.

2.3.2. Transactions and balances in foreign currency and indexation units

Foreign currency and indexation unit transactions are translated into the functional

currency using the exchange rates prevailing at the dates of the transactions.

Foreign currency gains and losses resulting from the settlement of such

transactions and from the translation at year-end exchange rates of monetary

assets and liabilities denominated in foreign currencies are recognized in the

Interim Consolidated Statements of Comprehensive Income, unless other

accounting standards dictate, such as in the case of cash flow hedges where such

effects may be recorded in equity.

Exchange rate differences affecting financial assets classified as measured at fair

value through profit or loss are presented as part of the profit or loss.

15



2.3.3. Exchange rates

Assets and liabilities in foreign currency and in Unidades de Fomento (an

inflation-linked unit of account used in Chile referred to as UF), are presented at

the following exchange and translation rates:

Date USD EUR UF

03-31-2020 852.03 934.55 28,597.46

12-31-2019 748.74 839.58 28,309.94

03-31-2019 678.53 761.28 27,565.76

12-31-2018 694.77 794.75 27,565.79

US$ = US dollar

EUR = Euro

UF = Unidad de Fomento (an inflation-linked unit of account)

2.4. Property, plant and equipment

All property, plant and equipment are initially stated at acquisition cost, plus all costs

directly attributable to bringing the asset to the condition necessary for it to be capable of

operating for its intended use.

Subsequently they are stated at historical cost less accumulated depreciation and

impairment losses, which, if any, are recorded in the interim consolidated statement of

comprehensive income.

Costs include expenditure directly attributable to the acquisition of assets and the

capitalized interest incurred during the construction and development period.

The cost of constructed assets includes the cost of materials and direct labor costs; any

other cost directly attributable to bringing the asset to the location and condition necessary

for it to be capable of operating in the manner intended by management; and the costs of

dismantling and removing the items and restoring the site in which they are located.

Work in progress is reclassified as operating assets under property, plant and equipment

once the testing period has been completed and the assets are available for use, at which

point their depreciation begins.

Costs of additions, modernization or improvements that represent an increase in

productivity, capacity, efficiency or extension of the useful lives of assets are capitalized

as an increase of the cost of the corresponding assets.

The substitutions or renovations of assets that increase their useful life, or their

economic capacity, are recorded as the higher value of the respective assets, with the

consequent accounting withdrawal of the replaced or renewed assets.

Periodic expenses for maintenance, conservation and repair are recognized directly in

profit or loss as costs of the period in which they are incurred.

16


Major maintenance costs of rolling stock, which includes among other things, replacement

of parts and pieces, are capitalized as an asset that is independent from the main asset, if

it is probable that future economic benefits related to the costs are received.

Depreciation of property, plant and equipment items is calculated using the straight-line

method to allocate costs over their estimated economic useful lives, except in the case of

certain technical components identified in rolling stock, which are depreciated on the basis

of cycles and kilometers traveled.

Amortization (depreciation) of property, plant and equipment according to IAS 16 must be

recorded separately for each significant part that makes up a final property, plant and

equipment item. In the case of rolling stock, the Company separately depreciates the

significant components of a property, plant and equipment item that have different useful

lives than the rest of the items that form it.

Residual values, where they are defined, and useful lives of assets are reviewed and

adjusted prospectively in each statement of financial position, so that the remaining useful

lives are consistent with the asset’s current service use and effective use.

An item of property, plant and equipment is derecognized upon disposal or upon its

permanent decommission and when no future economic benefits are expected from its

use or disposal.

Gains and losses on the sale of property, plant and equipment are calculated by

comparing the income obtained to the carrying amount and are included in the interim

consolidated statement of comprehensive income.

At least once a year the Company evaluates the existence of possible impairment of

property, plant and equipment, in accordance with IPSAS 21, as described in Note 2.8.

The effects of the impairment analysis are recognized directly in profit or loss.

2.5. Investment property

The Company’s investment property includes real estate (commercial stores, land and

buildings) held to earn rentals or for capital appreciation as a result of possible future

increases in their market prices.

The Company has commercial stores, land and buildings leased under operating leases.

Investment property that corresponds to land and buildings are valued using the cost

model.

Reclassification of a property within, or outside of, the investment property category

requires performing an assessment of whether the involved property meets, or has

ceased to meet, the definition of investment property, and this must be backed up by

observable evidence that a change in use has occurred.

17


As of the date of issuance of these financial statements, no such reclassification has been

made as no item has begun to meet or ceased to meet the definition of investment

property and therefore, there has been no substantial impact resulting therefrom on these

financial statements.

The estimated useful lives of investment property are detailed as follows:

Type of asset Useful life

Commercial stores 68 years on average

Other buildings 88 years on average

2.6. Intangible assets other than goodwill

2.6.1. Easements

Easements are presented at historical cost. If easements have indefinite useful

lives, they are not subject to amortization.However, indefinite useful life assets are

subject to review at each reporting period, to determine whether the determination

of indefinite useful life is still applicable. These assets are subject to annual

impairment testing.

2.6.2. Computer software

Licenses for information technology programs acquired are capitalized on the

basis of the costs incurred to acquire them and prepare them for use. Such costs

are amortized over their estimated useful lives.

Expenses related to in-house developing and maintaining computer programs do

not qualify for capitalization and are expensed when incurred.

2.7. Finance income and expenses

Finance income consists of interest from investing cash and cash equivalents, from

derivative transactions and other finance income, and is recognized in the Interim

Consolidated Statement of Comprehensive Income over the term of the financial

instrument, using the effective interest method in the case of assets at amortized cost and

fair value in the case of derivative transactions.

Finance costs, both interest and expenses on bank borrowings, and bonds, among others

(those recorded on an amortized cost basis) are recognized in the Interim Consolidated

Statement of Comprehensive Income over the term of the debt using the effective interest

method. Costs of interest incurred in the construction of any asset qualified as property,

plant and equipment, are capitalized over the period necessary to complete the asset for

its intended use, other interest costs are recorded as an expense in the consolidated

statement of comprehensive income.

18


2.8. Losses due to impairment of non-financial assets

Since the Company is a state-owned entity, its business model is focused on serving the

public and puts emphasis on providing social benefits. It has an operating, services and

infrastructure operation model, which means that its main source of income is established

through a technical fare determined by the authority that does not cover recovery of its

assets.

This business model defined by its shareholders, the Ministry of Finance and the

Corporación de Fomento de la Producción, referred to as CORFO, goes against the

concept of economic profitability of assets, as per IAS 36, where the value in use

corresponds to the present value of estimated future cash flows expected to be obtained

from the operation of the assets.

Therefore, the Company formally requested authorization from the Financial Market

Commission to apply IPSAS 21, a standard specific rule for State-owned entities which

hold non-cash-generating assets instead of IAS 36. Through Ruling 6158 dated March 5,

2012 the Financial Market Commission authorized the Company to apply IPSAS 21 to

assess the impairment of its assets.

The application of this standard allows the Interim Consolidated Financial Statements to

present the economic and financial reality of the Company.

This standard defines the value in use of a non-cash generating asset as the

present value of the asset's remaining service potential. The present value of the

remaining service potential of the asset is determined using the Depreciated Replacement

Cost Approach or the Restoration Cost Approach.

However, under specific circumstances in which certain assets lose their service potential,

the loss of value is recognized directly in profit or loss.

2.9. Financial assets

The Company classifies its financial assets in accordance with IFRS 9, in the following

valuation categories: at amortized cost, at fair value through profit or loss, at fair value in

other comprehensive income. The classification depends on the purpose for which the

financial assets were acquired. Management determines the classification of its financial

assets at initial recognition.

2.9.1. Financial assets at amortized cost

A financial asset must be measured at amortized cost, if the following two

conditions are met:

(a) The financial asset is held within a business model whose purpose is to hold

the financial assets to obtain contractual cash flows and

(b) The contractual terms of the financial asset give rise on specified dates to cash

flows that are solely payments of principal and interest.

In accordance with “IFRS 7 Financial Instruments: Disclosures”, we consider that

the carrying value of the assets, measured at amortized cost, is a reasonable

approximation of fair value. Therefore, as indicated in IFRS 7, it is not necessary

to make disclosures regarding the fair value of each asset.

19



2.9.2. Financial assets at fair value through other comprehensive income.

A financial asset should be measured at fair through other comprehensive

income, if the following two conditions are met:

(a) The financial asset is held within a business model whose objective is

achieved by both collecting contractual cash flows and selling financial assets

and

(b) The contractual terms of the financial asset give rise on specified dates to cash

flows that are solely payments of principal and interest.

2.9.3. Financial assets at fair value through profit or loss

A financial asset should be measured at fair value through profit or loss, unless

measured at amortized cost or at fair value through other comprehensive income.

When a derivative financial instrument is not designated as a hedging instrument,

all changes in fair value are recognized immediately in profit or loss.

Derecognition of financial assets

The Company and its subsidiaries derecognize a financial asset only when the contractual

rights on the financial assets' cash flows have expired, or when all the risks and rewards

of ownership of the financial asset are substantially transferred to some other entity. If the

Company does not transfer substantially all the risks and rewards of ownership and

continues to exercise control over the transferred asset, the asset is accounted for and an

associated liability is recorded for the amounts that must be paid. If the Company

substantially retains all the risks and rewards of ownership of the financial asset, the

Company still recognizes the financial asset and also a liability for the received cash

flows.

2.10. Inventories

Inventories correspond to spare parts required for the operations and which are

estimated to be used or consumed during one year.

Inventories are initially valued at their acquisition cost, subsequently valued at the lower

of cost value or net realizable value. Cost is determined using the weighted average

purchase price.

Spare parts classified as inventory are adjusted to their net realizable value, and their

technological obsolescence is recognized with a direct charge to profit or loss.

2.11. Trade and other receivables

Trade accounts receivable are recognized initially at fair value (nominal value which

includes an implicit interest rate, if applicable) and subsequently at amortized cost by the

effective interest method, less the provision for impairment. The provision is established

for expected credit losses over the life of the asset, at each balance sheet date, applying

the simplified approach for trade accounts receivable.

20


The Company is using the expected loss model, which contains historical collection

information for each tranche/stratification of its accounts receivable for the last three

years (using a matrix where the provision is stratified by maturity or default per days)

and additionally includes the expected losses projected by the statistical calculation of a

"forward looking", which takes into account the most relevant macroeconomic factors

that affect uncollectibility, and the projection is based on the probability of each scenario.

Trade receivables are presented net of an allowance for uncollectible accounts and a

provision is recognized as a charge to the Interim Consolidated Statement of

Comprehensive Income.

2.12. Cash and cash equivalents

Cash and cash equivalents include cash, checking account balances, term deposits and

other highly liquid short-term investments with original maturities of three months or less

and with no restrictions on their use and with little risk of a change in their fair value.

2.13. Share capital

The Company´s share capital are the Series A and Series B common shares.

2.14. Trade and other payables

Suppliers and other accounts payable are initially recognized at their fair value net of

directly attributable costs. They are subsequently valued at amortized cost.

2.15. Financial liabilities

Financial liabilities are classified either as financial liability “at fair value through profit

and loss” or as “other financial liabilities”.

Financial liabilities at fair value through profit or loss (FVTPL):

Financial liabilities are classified at fair value through profit or loss when they are held for

trading or are designated at fair value through profit and loss.

IFRS 9 largely preserves the existing requirements of IAS 39 for the classification of

financial liabilities. However, under IAS 39 all changes in the fair value of liabilities

designated as FVTPL are recognized in profit or loss, whereas under IFRS 9 these

changes in fair value are generally presented as follows:

i) the amount of the change in fair value that is attributable to changes in the liability 's

credit risk is presented in the other comprehensive income; and

ii) the remaining amount of the change in fair value is presented in profit or loss.

21


b) Other financial liabilities:

Other financial liabilities, including borrowings, are initially measured at fair value, net of

transaction costs. They are subsequently measured at amortized cost using the effective

interest rate method, in which interest expense is recognized on the basis of effective

interest rate.

The effective interest rate corresponds to the method of calculating the amortized cost of

a financial asset or liabilities and of allocating the interest income (expense) over the

relevant period. The effective interest rate is the rate that exactly discounts estimated

future cash flows receivable or payable (including all costs on points paid or received

that are an integral part of the effective interest rate, transaction costs and other

premiums or discounts) over the expected life of the financial instrument. All the

Company's long-term financial liabilities are accounted for under this method.

Derivative Financial Instruments

The Company uses derivative financial instruments to manage its exposure to volatility

risks in interest rates and exchange rates, including the use of foreign currency forward

contracts and interest rate swaps. See Note 23 for a detailed explanation of derivative

financial instruments.

Derivatives are initially recognized at fair value on the date on which the derivative

contract is entered into and are subsequently remeasured at fair value at each reporting

period end. The resulting gain or loss is recognized immediately in profit or loss, unless

the derivative is designated and is effective as a hedging instrument, in which case the

timing for recognizing it in profit or loss will depend on the nature of the hedging

relationship.

Hedge accounting.

The Company designates certain derivatives as hedging instruments against the foreign

exchange risk and as cash flow hedges against the inflation risk.

At the beginning of the hedging relationship, the Company documents the relationship

between the hedging instrument and the hedged item, as well as the risk management

objectives and the Company's strategy to carry out various hedging transactions. In

addition, at the beginning of the hedge and on an ongoing basis, the Company

documents whether the hedging instrument is effective to offset changes in the hedged

item's fair value or cash flows attributable to the hedged risk, which occurs when the

hedging relationship meets the following effectiveness requirements:

There is an economic relationship between the hedged item and the hedging

instrument;

The effect of credit risk does not dominate the value changes that result from that

economic relationship; and

The hedge ratio is the same as that resulting from the quantity of the hedged item

that the entity actually hedges and the quantity of the hedging instrument that the

entity actually uses to hedge that quantity of hedged item.

22



If the hedge ratio of a hedging relationship fails to meet the hedge effectiveness

requirement, but the risk management objective for that designated hedging relationship

remains unchanged, the Company will adjust the hedge ratio of the hedging relationship

(this is referred to in IFRS 9 as "rebalancing the hedge relationship") so that it complies

with hedge effectiveness requirement again.

Cash flow hedges - (cross currency swap and forward - exchange rate and inflation)

The effective portion of changes in the fair value of derivatives that are designated and

considered as cash flow hedges is recognized in other comprehensive income and

recorded in the line "Cash flow hedge reserve" in equity, limited to the cumulative

change in the fair value of the hedged item from the inception of the hedge. The gain or

loss relating to the ineffective portion of the hedging instrument is immediately

recognized in profit or loss and is included in "other profits (losses)".

The amounts previously recognized in other comprehensive income and accumulated in

equity are reclassified to profit or loss in the periods in which the hedged item is

recognized in profit or loss.

The Company discontinues hedge accounting only when the hedging relationship (or a

part of it) fails to meet the classification requirements (after rebalancing the hedge

relationship, if applicable). This includes instances where the hedging instrument expires

or is sold, terminated or exercised. The discontinuation is accounted for prospectively.

Any gain or loss recognized in other comprehensive income and accumulated in equity

until that date remains in equity and is recognized when the forecasted transaction is

finally recognized in profit or loss. When the forecasted transaction is no longer

expected to occur, the gain or loss accumulated in equity is recognized immediately in

profit or loss.

Embedded derivatives

The Company and its subsidiaries have established a procedure that enables them to

check for embedded derivatives in financial and non-financial contracts. In case there is

an embedded derivative, and if the host contract is not accounted for at fair value, there

is a determination of whether the characteristics and risks of some portion of the

contract´s cash flows are not closely related to the host contract, in which case such

portion is required to be separately recorded.

To date, the analyses carried out indicate that there are no embedded derivatives in the

contracts of the Company and its subsidiaries that are required to be accounted for

separately.

2.16. Income tax and deferred taxes

The income tax provision is determined through the application of the tax rate on the net

taxable profit for the period, after applying the permitted tax deductions, plus variations

in deferred tax assets and liabilities and tax credits.

23


Differences between the carrying amount of the assets and liabilities and their tax base

generate deferred tax assets or liabilities balances, which are calculated using the tax

rates that are expected to be in force when the assets and liabilities are realized.

The tax system applicable to the Company as of January 1, 2017, as it is a stock

corporation with no connection to final taxpayers, is the first category tax (the Chilean

corporate income tax) for the profits it obtains from operating its business. According to

the Chilean Income Tax Act (Act No. 824) this tax has a rate of 25%.

The deferred tax rate is measured using the tax rates expected to be applicable to the

temporary differences in the period when they are reversed using tax rates that by

enactment or substantial enactment will be applicable to the Company at the reporting

date.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent

that it is no longer probable that the related tax benefit will be realized, (See Note 18).

2.17. Employee benefits

2.17.1. Accrued vacations

The Company recognizes accrued vacation expenses using the accrual method.

2.17.2. Severance indemnity payments

The Company has created provisions for its obligations to pay severance

indemnity payments to all employees whose contracts and collective

agreements state that they are entitled to this benefit in all cases.

The liability recognized is the present value of that obligation plus/minus

adjustments on actuarial profits or losses and discounted debt service. The

present value of the obligation is determined by discounting estimated outgoing

cash flows, at a market interest rate for long-term debt instruments that

approximates the term of the termination benefits obligation up to their expiration

date.

2.17.3. Incentive bonuses

The Company has an annual incentive bonus plan for achieving objectives,

based on the individual conditions of each employment contract. These

incentives consist of a percentage of the applicable monthly salary and are

accrued on the basis of the estimated amount to be paid.

24



2.18. Provisions

The Company recognizes provisions when:

It has a present obligation, whether legal or constructive, as a result of past events;

It is probable that an outflow of resources will be necessary to settle the obligation;

and

The amount of the obligation can be estimated reliably.

The amount recognized as a provision must be the best estimate of the disbursement

necessary to pay the present obligation at the end of the reporting period.

2.19. Classification of balances (current and non-current)

In the Interim Consolidated Statements of Financial Position, balances are classified as

current when the maturity is equal to twelve months or less from the cut-off date of the

Interim Consolidated Financial Statements and as non-current, when it is in excess of

that period.

2.20. Revenue and Expense Recognition

The Company recognizes revenue from the following main sources:

Passenger transportation service

Sales channel

Lease of stores, and commercial and advertising spaces

Lease at inter-modal terminals

Lease of spaces for telephone and fiber optic antennas

Lease of land

Advisory services

The income is measured based on the consideration specified in the contracts with

customers. The Company recognizes revenue when performance obligations are

satisfied.

Revenue from passenger transportation service: The Company has a contract in place

with the Ministry of Transport and Telecommunications of Chile to provide public

passenger transportation services in Santiago.

Passenger transportation service revenue is recognized at fair value, and is recorded

daily based on use (number of trips) when a user passes the Bip card through the

turnstile. This number of pass-throughs is multiplied by the technical fare.

Revenue sales channel - Santiago Metro maintains a contract with the Ministry of

Transport and Telecommunications of Chile, providing services of issuance and post

sale and provision of a marketing network and uploading the means of access to the

transportation system public passengers of Santiago. These revenues are recognized

monthly and are equivalent to a total percentage of collections for transport fees charged

as discussed in the previous paragraph. Consequently, revenues are recognized over

time when the performance obligation is met.

25



Revenue from lease of stores, and commercial and advertising spaces: Revenue from

operating leases are recognized monthly on an accrual basis.

Revenue from lease at intermodal terminals: Intermodal terminal revenue is recognized

monthly on an accrual basis.

Revenue from lease space for telephone and fiber optic antennas: This kind of revenue

is recognized monthly on an accrual basis.

Revenue from lease of land: Revenue from lease of land is recognized monthly on an

accrual basis.

Revenue from advisory services: Metro de Santiago provides advisory services to

foreign public and private companies that are developing railway systems. This revenue

is recognized over time in the financial statements based on the hours incurred in the

advisory services project, based on the percentage of completion method.

Expenses include both losses and expenses that arise in the ordinary activities of the

Company. Expenses also include cost of sales, salaries and depreciation. In general,

expenses represent an outflow or decrease in assets such as cash and cash

equivalents, inventory or property, plant and equipment.

2.21. Lease agreements

The Company as lessor

The Company has a contract with the characteristics of a financial lease, which has

been accounted for as established in IFRS 16 "Leases.” Finance leases are leases

where the lessor transfers substantially all the risks and rewards incidental to ownership

of the asset to the lessee. Contracts that do not meet the requirements of a finance

lease are classified as operating leases, i.e. a lease is an operating lease whenever the

lessor retains a significant part of the risks and rewards incidental to ownership of the

leased assets.

In the case of finance leases, at the inception date, the Company recognizes the assets

held under finance leases and presents them as an account receivable, equal in value to

the net investment in the lease. The net investment in the lease is calculated as the sum

of the present value of the lease payments.

Subsequently, the Company recognizes the finance income over the term of the lease,

based on a model that reflects a constant rate of return on the net financial investment

made in the lease.

26



The Company as lessee

The Company evaluates whether a contract is or contains a lease at the inception of the

contract. If the contract does contain a lease, the Company recognizes a right-of-use

asset and a and lease liability. The start date of the lease is that on which the lessor

makes the asset available to the lessee for the lessee to use it.

The valuation of the right to use the asset includes the following items:

The amount of the initial valuation of the lease liability

Any lease payment made to the lessor prior to the start date or on the start date.

Any initial direct cost incurred by the lessee.

An estimate of the costs that the Company will incur in dismantling and withdrawing

or restoring the asset.

Subsequently, the right-of-use asset will be accounted for in accordance with IAS 16

Properties, plants and equipment.

The lease liability is initially measured at the present value of the lease payments

payable over the lease term, discounted at the rate implicit in the lease if that can be

readily determined. If that rate cannot be readily determined, the lessee shall use their

incremental borrowing rate.

2.22. New IFRS and interpretations issued by the IFRS Interpretations Committee (IFRIC).

New standards, amendments to standards and interpretations that are mandatory for the

first time for periods beginning on January 1, 2020.

IFRS Amendments Mandatory effective date

Definition of a Business (Amendments to IFRS 3) Annual periods beginning on or after January 01, 2020

Definition of Material (Amendments to IAS 1 and IAS 8) Annual periods beginning on or after January 01, 2020

Interest rate benchmark reform (amendment to IFRS 9, IAS 39 and IFRS 7)

Annual periods beginning on or after January 01, 2020

Conceptual Framework for Revised Financial Reporting Annual periods beginning on or after January 01, 2020

27



Management assessed the impact of the application of IFRS 16 by analyzing the lease

contracts and also the service contracts, in order to evaluate whether they were in the

scope of and, if so, the effects on the financial statements of the transition to IFRS 16.

Under this evaluation, those contracts which met the definition of a lease under IFRS 16

resulted in the Company recognizing an asset for right of use and also a liability in

regards to all the installments payable for those leases.

In accordance with the provisions of IFRS 16, the Company analyzed the contracts in

force as of March 31, 2020. This review process considered the formal aspects and in

addition the information provided by the Project Chiefs in order to determine whether or

not such contracts in force were in the scope of IFRS 16 and, if so, the effects on the

financial statements of the transition to IFRS 16.

Once the review was completed, the Company concluded that there are no significant

contracts falling under the scope of IFRS 16, since the contracts involve low-value

leases, over which IFRS 16 provides a practical expedient as to application which the

Company has adopted. However, the Company is constantly evaluating new contracts

to which IFRS 16 could be applied.

Impact of application of Amendments, New Interpretations

The application of the amendments and new interpretations did not have a significant

impact on the amounts reported in these Interim Consolidated Financial Statements.

However, they may affect the accounting for future transactions or arrangements.

The following new standards and interpretations have been issued but their application

date is not yet mandatory:

New IFRS Mandatory effective date

IFRS 17 — Insurance Contracts Annual periods beginning on or after January 01, 2021

IFRS Amendments Mandatory effective date

Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)

Annual periods beginning on or after January 1, 2022 Earlier application is permitted.

Sales or contributions of assets between an investor and its associate/joint venture (amendments to IFRS 10 and IAS 28)

Deferred indefinitely

Management considers that the future application of these standards and amendments

and interpretations is not expected to have a significant effect on the Consolidated

Financial Statements.

3. Management’s estimates and accounting criteria

The estimates and criteria used by management are continuously assessed and are based on

historical experience and other factors, including the expectation of occurrence of future events

that are considered reasonable based on the circumstances.

28



The most relevant management estimates and accounting criteria are detailed as follows:

3.1. Severance indemnity payments

The Company recognizes a liability for the agreed upon obligations for severance

payments using an actuarial methodology that considers factors such as the discount rate,

effective turnover and other factors inherent to the Company. Any change in these factors

and assumptions, shall have an impact on the carrying amount of the severance

obligation.

The Company determines the discount rate at the end of each year considering the

market conditions as of the valuation date. This interest rate is used to determine the

present value of estimated future cash outflows to be required to settle the severance

obligation. When determining interest rates, the Company considers representative rates

of financial instruments that are denominated in the currency in which the obligation is

expressed and which have expiry terms that are close to the payment terms of such

obligation.

Actuarial gains and losses arise from variances between estimated and actual

performance of actuarial assumptions and/or the modification of established actuarial

assumptions, which are reported directly in Other Comprehensive Income for the period.

3.2. Useful life of property, plant and equipment

Property, plant and equipment and intangible assets with finite useful lives are

depreciated using the straight-line method on the basis of an estimated useful life. Such

estimate takes into consideration technical aspects, nature and conditions of use of those

assets and might vary significantly as a consequence of technological innovations or

other variables, which will imply adjusting the remaining useful lives, and recognizing

higher or lower depreciation, as applicable. Likewise, residual values are determined

based on technical aspects that might vary in accordance with the specific conditions of

each asset.

3.3. Litigation and other contingencies

The Company has various types of lawsuits for which it is not possible to determine

exactly the economic effects that these may have on the Consolidated Financial

Statements. In cases where the Administration and the lawyers expect an unfavorable

result and where such results may be estimated reliably, provisions have been made with

a charge to expense based on estimates of the most likely amount to be paid.

3.4. Measurements and/or valuations at fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability

in an orderly transaction between market participants at the measurement date. The

Company uses the assumptions that market participants would use when establishing the

price of the asset or liability under current market conditions, including assumptions

regarding risk. To measure fair value the following must be determined:

29



a) The actual asset or liability to be measured.

b) For a non-financial asset, the highest and best use of the asset and if the asset is used

in combination with other assets or in an independent manner.

c) The market in which an orderly transaction would take place for the asset or liability;

and

d) The appropriate valuation technique(s) to be used when measuring fair value. The

valuation technique(s) used must maximize the use of relevant observable entry data

and minimize non-observable entry data.

To determine the expected loss model of IFRS 9 (simplified model), the Company and its

subsidiary have introduced variables in the simplified model so that they can measure fair

value based on historical data, percentages of recoverability of accounts receivable and

macroeconomic variables.

Market value hierarchies for items at fair value:

Each of the market values for the financial instruments is supported by a methodology for

calculation and entry of information. Each of them has been analyzed to determine at

which of the following levels they can be allocated:

Level 1, corresponds to methodologies using market units (without adjustment) in active

markets and considering the same assets and liabilities valued.

Level 2, corresponds to methodologies using market trading data, not included in Level 1,

which are observable for the assets and liabilities valued, whether directly (prices) or

indirectly (derived from prices).

Level 3, corresponds to methodologies using valuation techniques, which include data on

the assets and liabilities valued, which are not supported by observable market data,

where it would have a significant effect.

The Company measures and/or assesses all financial instruments at fair value upon initial

measurement; financial instruments are subsequently measured at amortized cost, except

for derivative transactions, cross currency swaps (CCS), forwards and interest rate swaps

(IRS), which continue to be measured at fair value after their initial recognition.

The Company hierarchically classifies its measurement of fair value under level 2, as

established in IFRS 13, and the costs of transactions attributable to those instruments are

recognized in income as they are incurred.

The changes in the fair value for the Interest Rate Swap (IRS) are considered as

components of the net profit or loss of the year, while for the Cross Currency Swap (CCS)

and forward, the changes in the fair value are initially recorded in equity.

30



The valuation techniques used to measure the fair value of assets and liabilities are:

The valuation techniques used by the Company are appropriate in the circumstances and

over which there exists sufficient available data to measure fair value, maximizing the use

of relevant observable variables and minimizing the use of unobservable variables. The

specific technique used by the Company to value and or measure the fair value of its

assets (derivative financial instruments) is discounted cash flow, based on market curves.

Entry data for fair value measurement:

Level 1:

Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2:

Quoted prices for identical or similar assets in markets that are not active.

Variables other than quoted prices that are observable for the asset, for example:

Interest rates, observable yield curves at commonly quoted intervals and implicit

volatilities.

Level 3:

Unobservable inputs.

Items where gains (losses) are recognized on fair value measurements.

Fair value measurement gains (losses) in Interest Rate Swaps (IRS) are recognized as

Other Gains (Losses) in profit or loss, while for Cross Currency Swaps (CCS) and forward

they are recognized in equity.

Fair value measurement for assets and liabilities

Measurement of fair value requires the determination of the asset or liability to measure

(derivative financial instruments). The Company uses the assumptions that market

participants would use when establishing the price of the asset or liability under current

market conditions, including assumptions regarding risk at the date of the measurement.

Should there be restrictions on the asset or payment of any liability, they would be taken

into account.

31


The detail and classification of financial assets as of March 31, 2020 and as of December

31, 2019 is as follows:

Assets at Assets at

03-31-2020

Fair value Fair value

Amortized through through

Cost profit or loss equity Total

ThCh$ ThCh$ ThCh$ ThCh$

Trade and other receivables 17,551,683 - - 17,551,683

Cash and cash equivalents 69,980,205 1,122,743 - 71,102,948

Cash and banks - 1,122,743 - 1,122,743

Term deposits 69,980,205 - - 69,980,205

Other financial assets 161,051,986 120,228 55,987,927 217,160,141

Term deposits 111,491,519 - - 111,491,519

Derivative transactions - 120,228 55,987,927 56,108,155

Finance lease 2,501,329 - - 2,501,329

Promissory notes receivable 558,808 - - 558,808

Advertising receivables 46,495,754 - - 46,495,754

Other financial assets 4,576 - - 4,576

Total financial assets 248,583,874 1,242,971 55,987,927 305,814,772

Assets at Assets at

12-31-2019 Fair value Fair value

Amortized through through



Trade and other receivables 17,668,064 - - 17,668,064

Cash and cash equivalents 101,741,543 4,761,726 - 106,503,269

Cash and banks - 4,761,726 - 4,761,726

Term deposits 99,295,250 - - 99,295,250

Repurchase agreements 2,446,293 - - 2,446,293

Other financial assets 201,414,717 273,997 16,407,725 218,096,439

Term deposits 151,649,628 - - 151,649,628


Finance lease 2,156,039 - - 2,156,039

Promissory notes receivable 678,522 - - 678,522

Advertising receivables 46,925,199 - - 46,925,199

Other financial assets 5,329 - - 5,329

Total financial assets 320,824,324 5,035,723 16,407,725 342,267,772

32


The detail and classification of financial liabilities as of March 31, 2020 and as of December 31,

2019 is as follows:

4. Cash and cash equivalents

Balances of cash and cash equivalents are detailed as follows:

Liabilities at Liabilities at


03-31-2020 Amortized through through



Interest-bearing loans 2,373,507,946 - - 2,373,507,946

Trade and other payables 122,167,928 - - 122,167,928

Derivative transactions - 421 1,111,040 1,111,461

Other financial liabilities 2,747 - - 2,747

Total financial liabilities 2,495,678,621 421 1,111,040 2,496,790,082

Liabilities at Liabilities at


12-31-2019 Amortized through through



Interest-bearing loans 2,221,979,112 - - 2,221,979,112

Trade and other payables 113,936,828 - - 113,936,828


Other financial liabilities 2,746 - - 2,746

Total financial liabilities 2,335,918,686 46,026 4,157,464 2,340,122,176

Item Currency 03-31-2020

ThCh$ 12-31-2019

ThCh$

Cash

Cash on hand CLP 47,659 36,501

US$ 3,128 5,212

Bank CLP 1,012,767 4,714,824

US$ 59,189 5,189

Total cash 1,122,743 4,761,726

Term deposits CLP 58,611,881 92,702,109

US$ 11,368,324 6,593,141

Total term deposits 69,980,205 99,295,250

Repurchase agreements CLP - 2,446,293

Total repurchase agreements - 2,446,293

Total cash and cash equivalents 71,102,948 106,503,269

Subtotal by currency CLP 59,672,307 99,899,727

US$ 11,430,641 6,603,542

33


Cash equivalents represent short-term highly liquid investments such as term deposits and

fixed income investments –repurchase agreements- that are easily convertible into cash, and

are subject to insignificant risk of changes in value, which are maintained to comply with short-

term payment commitments. The detail for the years 2020 and 2019 is as follows:

Term deposits

Accrued Carrying amount

Currency of Principal in

currency of Annual average

Average days to

Principal in domestic interest 03-31-2020

Type of investment

origin origin in thousands

rate Maturity currency in domestic currency

ThCh$ ThCh$ ThCh$

MetroPago term deposits CLP 2,520,042 1.84% 49 2,520,042 5,087 2,525,129

Term deposits CLP 56,025,840 1.85% 23 56,025,840 60,912 56,086,752

US$ 13,328.18 2.04% 9 11,356,012 12,312 11,368,324

Total 69,901,894 78,311 69,980,205

Accrued

Currency of Principal in

currency of Annual average

Average days to

Principal in domestic Interest

Carrying amount

Type of investment

origin origin in thousands

rate Maturity currency in domestic currency 12-31-2019

ThCh$ ThCh$ ThCh$


US$ 8,801.24 2.62% 22 6,589,840 3,301 6,593,141

Total 99,118,992 176,258 99,295,250

Repurchase agreements

Code Date

Counterparty Original currency

Subscription Annuall Maturity

Instrument identification

Carrying amount

Rate rate Amount 12-31-2019

Beginning End ThCh$ % ThCh$ ThCh$

CRV 12-27-2019 01-02-2020

Itau

Corredor de

Bolsa Ch$

1,000,000 1.96% 1,000,320 PROMISSORY

NOTE NR 1,000,213

CRV 12-30-2019 01-03-2020

Itau

Corredor de

Bolsa Ch$

446,000 1.96% 446,098 PROMISSORY

NOTE NR 446,025

CRV 12-30-2019 01-06-2020

Itau

Corredor de

Bolsa Ch$

1,000,000 1.96% 1,000,385 Corpbanc Bond

1,000,055

Total 2,446,000 2,446,803 2,446,293

34


5. Trade and other receivables, current

As of March 31, 2020 and as of December 31, 2019, this item consists of the following:

Trade and Other Receivables, Gross 03-31-2020

ThCh$ 12-31-2019

ThCh$

Trade debtors and other accounts receivable, gross 16,699,962 16,743,890

Trade receivables, gross (*) 11,878,637 10,521,935

Sales channel accounts receivable, gross 2,515,862 3,783,958

Other receivables, gross 2,305,463 2,437,997

Trade and Other Receivables, Net 03-31-2020

ThCh$ 12-31-2019

ThCh$

Trade and other receivables, net 16,030,051 16,090,004

Trade receivables, net 11,208,726 9,868,049

Sales channel accounts receivable, net 2,515,862 3,783,958

Other receivables, net 2,305,463 2,437,997

(*) Effective as of July 1, 2018, a contract was made with Massiva S.A., lasting a period of 10 years, which

establishes a minimum annual guaranteed income (MAG) payable during the term of the contract.

As of March 31, 2020 and as of December 31, 2019, the analysis of net trade and

accounts receivable by age and expiration date is detailed below:

Trade receivables, net03-31-2020

ThCh$

12-31-2019

ThCh$

Aged 3 months 9,420,454 4,231,606

Aged more than 3 months up to 1 year 1,439,872 5,113,450

Aged more than 1 year 348,400 522,993

11,208,726 9,868,049

Sales Channel Accounts Receivable, net03-31-2020

ThCh$

12-31-2019

ThCh$

Aged 3 months 2,466,393 3,685,763

Aged more than 3 months up to 1 year 8,276 71,664

Aged more than 1 year 41,193 26,531

Total 2,515,862 3,783,958

Other Receivables, net03-31-2020

ThCh$

12-31-2019

ThCh$

With 3 months maturity 1,747,451 1,974,972

With 3 months up to 1 year maturity 558,012 463,025

Total 2,305,463 2,437,997

35


Movements as of March 31, 2020 and as of December 31, 2019 in the impairment provision are

as follows:

Past due and outstanding trade receivables with impairment ThCh$

Balance as of December 31, 2018 611,902

Increase for the period 175,305

Decrease for the period (131,821)

Write-offs for the period (1,500)

Balance as of December 31, 2019 653,886

Increase for the period 125,724

Decrease for the period (109,699)

Write-offs for the period -

Balance as of March 31, 2020 669,911

The Company establishes a provision based on an expected loss for trade receivables.

The Company only uses the provision method and no direct write-offs, for better control of this

item. Once pre-judicial and judicial collection measures have been exhausted, the assets are

written-off against the provision recorded.

6. Inventories

This item comprises the following:

03-31-2020 12-31-2019

ThCh$ ThCh$

Inventories and stock 2,412,704 2,083,438

Spare parts and accessories for maintenance 15,795,754 14,721,017

Imports in transit and other 887,328 625,839

Total 19,095,786 17,430,294

Classes of inventories

As of March 2020 and 2019, inventory consumption was charged to the Consolidated Statement of Comprehensive Income in the cost of sales line item, in the amount of ThCh$1,632,997 and ThCh$1,887,948, respectively.

As of March 2020, there were no write-offs of inventories. As of the same period of the previous

year they amounted to ThCh$ 6,120. Based on the analysis carried out by the Technical

Management for the stock of spare parts, maintenance accessories and supplies presented in

this group, no objective evidence of impairment was found for this asset class.

During the year, the Company records no inventory items subject to pledge or guarantee.

36


7. Intangible assets other than goodwill

Intangible assets other than goodwill correspond to licenses and software and transit

easements. They are accounted for using the acquisition cost and subsequently they are carried

at cost net of accumulated amortization and impairment losses, if any.

Licenses and software are amortized using the straight-line method over the applicable useful

life, which is generally estimated at four years. For easements, since the contracts are

established with no expiry date, easements are considered to have indefinite useful life, and

therefore they are not amortized.

At the balance sheet date, the Company found no objective evidence of impairment for this type

of asset.

The items within the Interim Consolidated Statement of Comprehensive Income that include

amortization of intangible assets with finite useful lives are in the cost of sales and administrative

expenses line items.

There are no intangible assets with ownership restrictions or that provide security for any

liabilities of the Company.

a) Intangible assets other than goodwill for the March 2020 period and the 2019 year, are as

follows:

Item

03-31-2020 12-31-2019

Intangible assets, gross

Accumulated amortization

Intangible assets,

net

Intangible assets, gross

Accumulated amortization

Intangible assets, net

ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$

Licenses and Software 9,226,879 (5,380,288) 3,846,591 9,200,644 (5,170,569) 4,030,075

Easements 4,346,229 - 4,346,229 4,346,229 - 4,346,229

Total 13,573,108 (5,380,288) 8,192,820 13,546,873 (5,170,569) 8,376,304

b) Movements of intangible assets other than goodwill for the year ended as of March 31,

2020, are as follows:

Movements

Licenses and Software

Easements Total intangible assets, net

ThCh$ ThCh$ ThCh$

Opening balance 01-01-2020 4,030,075 4,346,229 8,376,304

Transfers 26,235 - 26,235

Amortization (209,719) - (209,719)

Closing balance 03-31-2020 3,846,591 4,346,229 8,192,820

Average remaining useful life 4 years Indefinite

37


Movements of intangible assets other than goodwill for the year ended as of December 31,

2019, are as follows:

8. Property, plant and equipment

a) Property, plant and equipment items comprise the following:

Property, plant and equipment 03-31-2020 12-31-2019

ThCh$ ThCh$

Classes of property, plant and equipment, net

Property, plant and equipment, net 4,894,621,571 4,867,401,435

Works in progress, net 534,993,321 495,582,298

Land, net 132,899,647 132,899,647

Civil works, net 2,662,065,921 2,670,687,286

Buildings, net 166,596,407 167,366,517

Rolling stock, net 1,010,211,719 1,006,350,544

Electrical equipment, net 349,112,136 354,825,762

Machinery and equipment, net 20,691,460 21,210,182

Other, net 18,050,960 18,479,199

Classes of property, plant and equipment, gross

Property, plant and equipment, gross 5,730,850,351 5,675,209,325

Works in progress, gross 534,993,321 495,582,298

Land, gross 132,899,647 132,899,647

Civil works, gross 2,886,832,809 2,886,832,809

Buildings, Gross 189,896,942 189,893,979

Rolling stock, gross 1,336,938,480 1,321,524,848

Electrical equipment, gross 588,230,377 586,742,886

Machinery and equipment, gross 43,007,815 43,253,659

Other, gross 18,050,960 18,479,199

Classes of accumulated depreciation and impairment, Property, plant and equipment Total accumulated depreciation and impairment, Property, plant and equipment 836,228,780 807,807,890

Accumulated depreciation of civil works 224,766,888 216,145,523

Accumulated depreciation of buildings 23,300,535 22,527,462

Accumulated depreciation of rolling stock 326,726,761 315,174,304

Accumulated depreciation of electrical equipment 239,118,241 231,917,124

Accumulated depreciation of machinery and equipment 22,316,355 22,043,477

Movements

Licenses and Software

Easements Total

intangible assets, net

ThCh$ ThCh$ ThCh$

Opening balance 01-01-2019 2,062,224 4,329,892 6,392,116

Additions 30,001 16,337 46,338

Transfers 2,637,319 - 2,637,319

Amortization (699,469) - (699,469)

Closing balance 12-31-2019 4,030,075 4,346,229 8,376,304

Average remaining useful life 4 years Indefinite

38


b) The detail of movements in property, plant and equipment for the 2020 period and 2019 year, is as follows:

2020 movements Works in progress

Land Civil works Buildings Rolling stock Electrical

equipment

Machinery and

equipment Other

Property, plant and

equipment, net

Opening balance at January 1, 2020 495,582,298 132,899,647 2,670,687,286 167,366,517 1,006,350,544 354,825,762 21,210,182 18,479,199 4,867,401,435

Mo

vem

ents

Additions 53,892,327 - - 2,964 2,593,297 32,441 101,202 - 56,622,231

Transfers (14,481,304) - - - 12,828,856 1,590,352 35,861 - (26,235)

Spare parts transfer - - - - - - - (428,239) (428,239)

Derecognition or sales - - - - (6,615) (1,694) (30) - (8,339)

Depreciation expense - - (8,621,365) (773,074) (11,554,363) (7,334,725) (655,755) - (28,939,282)

Total movements 39,411,023 - (8,621,365) (770,110) 3,861,175 (5,713,626) (518,722) (428,239) 27,220,136

Balance as of March 31, 2020 534,993,321 132,899,647 2,662,065,921 166,596,407 1,010,211,719 349,112,136 20,691,460 18,050,960 4,894,621,571

,

2019 movements Works in progress

Land Civil works Buildings Rolling stock Electrical

equipment

Machinery and

equipment Other

Property, plant and

equipment, net

Opening balance at January 1, 2019 1,436,411,396 132,620,404 1,916,968,710 111,266,828 807,013,830 262,608,816 23,294,181 15,303,906 4,705,488,071

Mo

vem

ents

Additions 149,173,750 279,243 99,598,163 148,348 17,076,527 47,074,075 1,297,408 82,151 314,729,665

Transfers (1,090,002,848) - 709,478,821 59,289,688 236,425,093 77,912,378 1,219,109 - (5.677.759)

Spare parts transfer - - - - - - - 3,093,142 3,093,142

Derecognition or sales - - (20,574,176) (275,659) (8,730,945) (2,945,508) (1,867,391) - (34,393,679)

Depreciation expense - - (34,784,232) (3,062,688) (45,433,961) (29,823,999) (2,733,125) - (115,838,005)

Total movements (940,829,098) 279,243 753,718,576 56,099,689 199,336,714 92,216,946 (2,083,999) 3,175,293 161,913,364

Closing balance as of December 31, 2019 495,582,298 132,899,647 2,670,687,286 167,366,517 1,006,350,544 354,825,762 21,210,182 18,479,199 4,867,401,435

39


c) The useful lives of the main assets are as follows:

ItemEstimated useful

life in years

Road network 60

Stations 100

Tunnels 100

Rolling stock 41

d) Written-off assets

In 2020 period, property, plant and equipment worth ThCh$ 30 has been written off.

As of March 31, 2020, 112 out of the 136 stations are operational, representing 82% of the

network. In addition, all the lines are operational (L1, L2, L3, L4, L4A, L5 and L6). From the point

of view of the extension in kilometers, 92% of the total network is operational.

Lines Non-Operating Stations (as of March 31)

1 Baquedano L1 San Pablo Neptuno

2 Los Héroes (Only for transfer)

3 Cardenal Caro

4 Macul Los Quillayes Protectora de Infancia

Trinidad Elisa Correa San Jose de la Estrella

4A Santa Julia La Granja San Ramón

5

Plaza Maipú Barrancas Pedrero

Santiago Bueras Cummings Laguna Sur

Del Sol Baquedano L5

Monte Tabor Las Parcelas

2019 Write-offs

The violent riots that broke out on October 18, 2019 led to mass fare-dodging evasions at most of

the stations and later on inflicted damage to Metro's infrastructure. The Company suspended

operations across the entire network effective October 18 through October 20, 2019, conducting

technical analyses to determine the amount and impact of the damage.

Following the review of those technical reports, budget estimation and accounting analyses, 6

evaluations of damaged assets were prepared: i) System and Equipment, ii) Rolling stock, iii)

Stations, iv) Vertical transportation, v) Charge and toll network, and vi) Technological support,

which contained a detail of all the damaged assets, accounting balances on the SAP system,

purchase value, net value, derecognition value, total useful life, residual useful life and/or

percentage of write-off of each asset.

40


Type of Asset Minutes

No. Amount of Assets

Amount (MCh$)

Systems and Equipment 38 321 18,182

Rolling stock 30 13 8,714

Stations 34 272 5,114

Vertical Transportation 37 75 1,350

Cargo network and toll 33 153 958

Technological Support 36 86 4

Total 34,322

As of December 31, 2019, 111 out of the 136 stations are operational, representing 82% of the

network. In addition, all the lines are operational (L1, L2, L3, L4, L4A, L5 and L6). From the point

of view of the extension in kilometers, 92% of the total network is operational.

Lines Non-Operating Stations (as of December 31)

1 Baquedano L1 San Pablo Neptuno

2 Los Héroes (Only for transfer)

3 Cardenal Caro

4 Macul Los Quillayes Protectora de Infancia

Trinidad Elisa Correa San Jose de la Estrella

4A Santa Julia La Granja San Ramón

5

Plaza Maipú Barrancas Ñuble (Only for transfer)

Santiago Bueras Cumming Pedrero

Del Sol Baquedano L5 Laguna Sur

Monte Tabor Las Parcelas

6 Ñuble (Only transfer)

As of December 31, 2019, property, plant and equipment worth ThCh$ 34,322,243 had to be

written off following the damage these assets sustained amid the violence that broke out on

October 18, 2019. The following table provides a detail of the assets written off and the amounts

(ThCh$) involved:

Classes of property, plant and equipment

Property, plant and

equipment, gross

Accumulated depreciation of the value of property,

plant and equipment

Written off property, plant and equipment,

net

Buildings 378,450 (119,590) 258,860

Electrical equipment 5,342,671 (2,424,655) 2,918,016

Machinery and equipment 2,251,809 (394,774) 1,857,035

Rolling stock 11,955,797 (3,241,641) 8,714,156

Civil works 23,950,197 (3,376,021) 20,574,176

Total 43,878,924 (9,556,681) 34,322,243

41


e) Investment projects

As of March 31, 2020, the estimated balance to be executed for the authorized projects that are

part of the Company's expansion plan amounts to approximately MCh$456,877, composed, by

investment type, of: MCh$235,181 in Civil Works, MCh$190,909 in Systems and Equipment and

MCh$30,787 in Rolling Stock, with scheduled end in the year 2026.

As of December 31, 2019, the estimated balance to be executed for the authorized projects that

are part of the Company's expansion plan amounts to approximately MCh$438,737, composed,

by investment type, of: MCh$238,608 in Civil Works, MCh$175,078 in Systems and Equipment

and MCh$25,051 in Rolling Stock, with scheduled end in the year 2026.

f) Spare parts and accessories

As of March 31, 2020, spare parts and accessories and maintenance materials amounted to

ThCh$20,582,378 (ThCh$20,964,346 in 2019). These amounts include spare parts that have

remained idle for over four years, which resulted in an allowance for obsolescence of

ThCh$2,643,866 during the 2020 period and 2019 year.

g) Other disclosures

1. The property, plant and equipment that is fully amortized and is still in use is ThCh$26,081,835

as of March 31, 2020 (ThCh$26,589,292 in 2019).

2. There are no material property, plant and equipment items that have been removed and not

classified, that are recorded as held for sale in accordance with IFRS 5.

3. The Company revalued the useful life of rolling stock NS74.

h) Financing costs

During 2020, capitalized borrowing costs associated with property, plant and equipment

amounted to ThCh$4,180,302 (ThCh$16,016,181 in 2019).

42

9. Investment property

Investment property corresponds mainly to commercial stores, land and buildings that are held by the

Company to be exploited under operating leases.

Investment property is measured using the cost model.

The total investment property amounts to ThCh$25,260,427 as of March 31, 2020

(ThCh$25,342,044 in 2019).

Investment property Commercial

stores Land Buildings Total

Balances as of 01-01-2020 16,577,416 607,816 8,156,812 25,342,044

Depreciation (57,959) - (23,658) (81,617)

Balances as of 03-31-2020 16,519,457 607,816 8,133,154 25,260,427

Investment property Commercial

stores Land Buildings Total

Balance as of 01-01-2019 13,781,411 607,816 8,252,192 22,641,419

Transfers 3,040,440 - - 3,040,440

Write offs (*) (12,453) - (740) (13,193)

Depreciation (231,982) - (94,640) (326,622)

Balances as of 12-31-2019 16,577,416 607,816 8,156,812 25,342,044

(*) These are the stores damaged by the riots that began October 18, 2019; they are reported in the minutes of damaged

assets.

As established by IAS 40, an estimate of fair value must be disclosed for investment properties

valued at the Cost Model. For this purpose, we have determined such calculation using internal

valuations, based on discounted future projected cash flows. It is estimated that as of March 31,

2020 this fair value amounts to ThCh$159,624,515 (ThCh$143,410,547 as of March 2019).

Investment property has been classified as a Level 3 fair value, based on the inputs for the valuation

technique used (see Note 3.4) as follows:

Item 03-31-2020 03-31-2019

ThCh$ ThCh$

Commercial stores 123,397,691 104,996,696

Land 26,140,269 29,387,177

Buildings 10,086,555 9,026,674

Total 159,624,515 143,410,547

43


Income and expenses from investment property as of March 2020 and 2019 is as follows:

Investment property income and expenses

01-01-2020 01-01-2019

03-31-2020 03-31-2019

ThCh$ ThCh$

Commercial stores 1,722,739 1,812,999

Land 356,074 492,184

Buildings 185,310 199,152

Total rental income 2,264,123 2,504,335

Commercial stores (real estate tax) (39,289) (38,540)

Land (real estate tax) (11,734) (11,768)

Buildings (real estate tax) (28,784) (28,718)

Commercial stores (depreciation) (57,960) (57,996)

Buildings (depreciation) (23,658) (21,868)

Total lease expenses (161,425) (158,890)

The Company has not established liens, mortgages or other kind of security to provide the

investment property as collateral.

Lease contracts generally establish the obligation to maintain and repair properties. Therefore,

expenses are borne by the lessees, except for expenses for the payment of property taxes, which

are borne by the less or.

The future cash flow projections associated with commercial stores, land and buildings, based on a

discount rate of 3.80% as of March 2020 (4.69% as of March 2019), are the following:

Item 03-31-2020 03-31-2019

ThCh$ ThCh$

Commercial stores

Up to 1 year 3,734,261 3,896,501

More than 1 year up to 5 years 18,158,817 22,687,149

More than 5 years 108,887,203 84,318,154

Land Up to 1 year 771,836 1,057,802


More than 5 years 22,505,932 22,890,258

Buildings Up to 1 year 401,683 428,019


More than 5 years 11,712,665 9,262,093

Total 171,878,938 153,191,080

44


10. Other financial assets, current and non-current

Other current and non-current financial assets are detailed below:

Item

03-31-2020 12-31-2019

Current Non-current Current Non-current


Financial investments, more than three months 111,491,519 - 151,649,628 -

Derivative transactions 6,913,670 49,194,485 4,601,090 12,080,632

Finance lease 395,442 2,105,887 236,840 1,919,199

Promissory notes receivable - 558,808 - 678,522

Advertising receivable (*) - 46,495,754 - 46,925,199

Other accounts receivable - 4,576 - 5,329

Total 118,800,631 98,359,510 156,487,558 61,608,881

(**) Effective as of July 1, 2018, a contract was made with Massiva S.A., lasting a period

of 10 years, which establishes a minimum annual guaranteed income (MAG) payable

during the term of the contract.

Financial investments, over 3 months

Term deposits

Currency of origin

Principal in domestic

currency in thousands

Annual average

rate

Average days to maturity

Principal in domestic currency

Accrued interest in domestic currency

Type of investment Carrying amount

03-31-2020

ThCh$ ThCh$ ThCh$


Total 110,966,041 525,478 111,491,519

Original currency

Principal in domestic

currency in thousands

Annual average

rate

Average days to maturity

Principal in domestic currency

Accrued interest in domestic currency

Carrying amount

Type of investment 12-31-2019

ThCh$ ThCh$ ThCh$


Total 151,028,183 621,445 151,649,628

45


Expected liquidity analysis (by maturity) Derivative assets as of 03-31-2020

Total, current Total non-current

Tax ID No.: Name CountryTax ID No.: Name Country Currency Nominal Type of Up to 90 days 90 days - 1 year 03-31-2020 1 to 3 years Over 5 years 03-31-2020

rate Amortization ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$

61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile USD 4.75000% maturity - 188,867 188,867 4,245,753 - 4,245,753

61.219.000-3 Metro S.A. Chile 97.032.000-8 Bilbao Vizcaya Argentaria Chile USD 4.75000% maturity - 188,867 188,867 4,479,742 - 4,479,742

61.219.000-3 Metro S.A. Chile 97.036.000-K Banco Santander Chile USD 4.75000% maturity - 188,867 188,867 5,240,858 - 5,240,858





61.219.000-3 Metro S.A. Chile 97.032.000-8 Bilbao Vizcaya Argentaria Chile USD 4.75000% maturity - 188,867 188,867 4,860,794 - 4,860,794



61.219.000-3 Metro S.A. Chile 59.046.320-5 BNP Paribas France USD 4.19000% half-yearly - 120,228 120,228 - - -

Total - 2,008,897 2,008,897 49,194,485 - 49,194,485

Current Non-current

Maturity Maturity

Derivative assets as of 12-31-2019

Total, current Total non-current

Tax ID No.: Name CountryTax ID No.: Name Country Currency Nominal Type of Up to 90 days 90 days - 1 year 12-31-2019 1 to 3 years Over 5 years 12-31-2019

rate Amortization ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$

61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile USD 4.75000% maturity 432,709 - 432,709 - 549,735 549,735

61.219.000-3 Metro S.A. Chile 97.032.000-8 Bilbao Vizcaya Argentaria Chile USD 4.75000% maturity 432,709 - 432,709 - 779,471 779,471

61.219.000-3 Metro S.A. Chile 97.036.000-K Banco Santander Chile USD 4.75000% maturity 432,709 - 432,709 - 1,519,466 1,519,466




61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile USD 4.75000% maturity 432,709 - 432,709 - 1,192,392 1,192,392

61.219.000-3 Metro S.A. Chile 97.032.000-8 Bilbao Vizcaya Argentaria Chile USD 4.75000% maturity 432,709 - 432,709 - 1,152,887 1,152,887

61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile USD 4.75000% maturity 576,947 - 576,947 - 2,871,854 2,871,854

61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile USD 4.75000% maturity 288,474 - 288,474 - 349,418 349,418

61.219.000-3 Metro S.A. Chile 59.046.320-5 BNP Paribas France USD 4.19000% half-yearly 123,384 150,613 273,997 - - -

Total 4,450,477 150,613 4,601,090 - 12,080,632 12,080,632

Maturity Maturity

Current Non-current

46


Forward:

Total, current

Tax ID No.: Name Country Tax ID No.: Name Country Currency Notional Up to 90 days 90 days - 1 year 31-03-2020

amount ThCh$ ThCh$ ThCh$

61.219.000-3 Metro S.A. Chile 97.018.000-1 Banco Scotiabank Chile USD 3,244,671.56 271,968 - 271,968


61.219.000-3 Metro S.A. Chile 97.018.000-1 Banco Scotiabank Chile USD 16,500,162.60 1,404,164 - 1,404,164

61.219.000-3 Metro S.A. Chile 97.018.000-1 Banco Scotiabank Chile USD 18,608,554.30 1,567,399 - 1,567,399


61.219.000-3 Metro S.A. Chile 97.036.000-K Banco Santander Chile USD 1,271,201.34 106,145 - 106,145

Total 58,281,835.68 4,904,773 - 4,904,773

Fair value

Maturity

Finance lease

On August 1, 2004 and through July 31, 2034, the Company leased out to Enel Distribución Chile

S.A. (Ex ChilectraS.A.) each and every one of the components of the SEAT Rectification

Substations, Vicente Valdés and the 20 KV networks up to their arrival to the verifying spots. The

useful life of the assets has the same duration as the respective lease contract, therefore and in

accordance with IFRS 16, it is a finance lease. For that reason, machinery and equipment was

derecognized from property, plant and equipment and was recognized as a right to collect

payments for lease, calculated at the present value of the lease payments.

The present value of the lease payments receivable is projected until the year 2034, considering a

discount rate of 10% that is expressed in the respective lease agreement.

Metro S.A. issues an annual invoice to Enel Distribución Chile S.A., during the first 15 days of July,

which shall be paid 30 days after that invoice is received. The payments that the tenant makes are

divided into two parts, one that represents the financial burden and another which reduces the

existing principal of the obligation. The total financial burden is distributed among the years that

constitute the term of the lease.

There are no amounts of unsecured residual values accrued in favor of the lessor.

There is no accumulated provision for minimum payments on uncollectible leases.

There are no contingent leases recognized as income for the year.

Outstanding future minimum lease payments

03-31-2020 12-31-2019

Gross Amount ThCh$$

Interest ThCh$

Current Value ThCh$

Gross Amount ThCh$$

Interest ThCh$

Current Value ThCh$

Up to 1 year 443,303 47,861 395,442 236,840 - 236,840

More than 1 year up to 5 years 1,347,562 823,286 524,276 1,184,200 765,364 418,836

More than 5 years 2,156,099 574,488 1,581,611 2,131,559 631,196 1,500,363

Total 3,946,964 1,445,635 2,501,329 3,552,599 1,396,560 2,156,039

47


11. Other non-financial assets, current and non-current

Other current and non-current non-financial assets are detailed below:

Other non-financial assets, current 03-31-2020 12-31-2019

ThCh$ ThCh$

Pre-paid expenses 116,544 99,215

Advance payments to suppliers and personnel 4,609,103 6,482,194

Bonus for collective bargaining 3,284,604

2,512,757

Other accounts receivable 632,144 759,227

Total 8,642,395 9,853,393

Other non-financial assets, non-current 03-31-2020 12-31-2019

ThCh$ ThCh$

Funds allocated to pay for expropriations of new lines 16,083,460 13,794,166

VAT credit 10,796,253 9,903,699

Investment land under lease contracts 1,028,162 1,018,037

Advance for severance indemnities and other loans to personnel 2,356,597 2,233,755

Bonus for collective bargaining 3,026,317

4,454,312

Total 33,290,789 31,403,969

12. Other financial liabilities, current and non-current


Item

03-31-2020 12-31-2019

Current Non-current Current Non-current


Interest-bearing loans 87,016,143 463,129,792 71,407,756 407,673,720

Bonds 63,273,806 1,760,088,206 78,368,327 1,664,529,309

Derivative transactions 1,111,461 - 4,203,490 -

Other - 2,746 - 2,746

Total 151,401,410 2,223,220,744 153,979,573 2,072,205,775

48


Half-yearly and equivalent interest-bearing loans as of 03-31-2020 (on an accrual basis).

Current Non-current

Maturity

Total, current

Maturity Total non-

current

Tax ID No. Name Country Tax ID No. Name Country Currency Nominal and Up to 90 days 90 days - 1 year 03-31-2020

1 to 3 years 3 to 5 years Over 5 years

03-31-2020

effective rate ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$

61.219.000-3 Metro S.A. Chile 59.046.320-5 BNP Paribas France USD 4.40% 29,954,385 25,068,422 55,022,807 112,090,541 74,727,027 101,799,182 288,616,750

61.219.000-3 Metro S.A. Chile O-E Natixis Bank France USD 0.65% 1,059,741 2,575,879 3,635,620 10,836,937 4,833,392 5,357,452 21,027,781

61.219.000-3 Metro S.A. Chile O-E Natixis Bank France Euros 2.00% 28,435 46,053 74,488 180,012 8,011 188,023

61.219.000-3 Metro S.A. Chile O-E Sumitomo Mitsui Banking Corp Japan USD 4.39% 15,508,458 12,774,770 28,283,228 76,648,619 51,099,079 25,549,540 153,297,238

Total 46,551,019 40,465,124 87,016,143 199,756,109 130,667,509 132,706,174 463,129,792

Half-yearly and equivalent interest-bearing loans as of 12-31-2019 (on an accrual basis).

Current Non-current

Maturity

Total, current

Maturity Total non-

current

Tax ID No. Name Country Tax ID No. Name Country Currency Nominal and Up to 90 days 90 days - 1 year 12-31-2019

1 to 3 years 3 to 5 years Over 5 years

12-31-2019

effective rate ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$

61.219.000-3 Metro S.A. Chile 59.046.320-5 BNP Paribas France USD 4.40% - 45,040,705 45,040,705 98,502,014 65,668,009 89,458,258 253,628,281

61.219.000-3 Metro S.A. Chile O-E Natixis Bank France USD 0.90% 692,841 2,498,358 3,191,199 9,523,196 4,572,599 5,059,072 19,154,867

61.219.000-3 Metro S.A. Chile O-E Natixis Bank France Euros 2.00% 8,689 57,681 66,370 170,074 7,197 177,271

61.219.000-3 Metro S.A. Chile O-E Sumitomo Mitsui Banking Corp Japan USD 3.41% 23,109,482 23,109,482 67,356,650 44,904,434 22,452,217 134,713,301

Total 701,530 70,706,226 71,407,756 175,551,934 115,152,239 116,969,547 407,673,720

49


Interest-bearing loans:

Loan from Natixis Bank (financial protocol of the French Government to the Chilean

government) in the amount of US$87,793,769.88. As of March 31, 2020 it has been fully used,

leaving a principal balance of US$28,919,280.03 (US$29,822,455.03 in 2019).

Loan from Natixis Bank (financial protocol of the French Government to the Chilean

government) in the amount of €1,573,093.76. As of March 31, 2020 it has been fully used,

leaving a principal balance of Euros 279,844.54 (Euros 289,796.26 in 2019).

Buyer Credit Agreement for Extension Projects on Line 5 to Maipú and Extension of Line 1 to

Los Dominicos, with a syndicate of international banks headed by BNP Paribas, in the amount

of US$260,000,000.00. This financing is not guaranteed by the Government. As of March 31,

2020 it has been fully used, leaving a principal balance of US$14,991,645.25

(US$14,991,645.25 in 2019).

Buyer Credit Agreement for Extension Projects on Lines 3 and 6, with a syndicate of

international banks headed by BNP Paribas S.A., of US$550,000,000,00 signed on December

18, 2014. On October 26, 2016, the Company agreed with the bank to reduce the authorized

amount to US$450,000,000.00. This financing is not guaranteed by the Government. As of

March 31, 2010 US$421,258,648.89 have been used, leaving a principal balance of

US$382,592,470.71 (US$382,592,470.71 in 2019).

This agreement requires, in each calendar year, a debt to equity ratio equal to or less than 1.70

times and a minimum equity of ThCh$700 million. Those covenants are calculated and determined

using the consolidated financial statements prepared as of December 31 of each calendar year and

presented to the CMF.

Financial Loan Agreement for Extension Projects on Lines 3 and 6, with a syndicate of

international banks headed by Sumitomo Mitsui Banking, in the amount of US$250,000,000,00

signed on December 18, 2014. On October 26, 2016, the Company agreed with the bank on

reducing the authorized amount to US$225,000,000.00. This financing is not guaranteed by the

Government. As of March 31, 2020 it has been fully used, leaving a principal balance of

US$209,906,666.67 (US$209,906,666.67 in 2019).

This agreement requires, in each calendar year, a debt to equity ratio equal to or less than 1.70

times and a minimum equity of ThCh$700 million. Those covenants are calculated and determined

using the consolidated financial statements prepared as of December 31 of each calendar year and

presented to the CMF.

50


Bonds payable

The Company’s domestic and foreign bonds as of 03-31-2020 (on an accrual basis).

Total current Total non-current

Tax ID No.: Country Tax ID No.: Banco RTB (*) Nominal Nominal Type of Up to 90 days 90 days - 1 year 03-31-2020 1 to 3 years 3 to 5 years Over 5 years 03-31-2020

Debtor Debtor Bank and payer rate effective Amortization ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$

A 61.219.000-3 Metro S.A. Chile 97.080.000-K Banco Bice Chile UF 5.6% 6.3% half-yearly 3,002,733 3,948,150 6,950,883 33,780,750 33,030,066 6,459,537 73,270,353

B 61.219.000-3 Metro S.A. Chile 97.080.000-K Banco Bice Chile UF 5.6% 5.9% half-yearly 2,468,899 1,501,367 3,970,266 14,262,983 16,515,033 7,759,957 38,537,973

C 61.219.000-3 Metro S.A. Chile 97.080.000-K Banco Bice Chile UF 5.5% 5.5% half-yearly 2,859,746 3,809,798 6,669,544 22,163,032 31,457,206 23,527,202 77,147,440

D 61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile UF 5.5% 5.1% half-yearly 2,859,746 3,875,318 6,735,064 17,158,476 26,452,651 40,849,733 84,460,860

E 61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile UF 5.5% 4.9% half-yearly 2,675,082 2,001,822 4,676,904 12,010,933 11,510,478 40,385,615 63,907,026

F 61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile UF 5.5% 5.0% half-yearly 905,587 1,866,711 2,772,298 8,150,276 7,810,681 27,294,991 43,255,948

G 61.219.000-3 Metro S.A. Chile 97.080.000-K Banco Bice Chile UF 4.5% 3.1% half-yearly 1,334,548 1,469,174 2,803,722 11,343,659 8,007,289 51,532,638 70,883,586

H 61.219.000-3 Metro S.A. Chile 97.036.000-K Banco Santander Chile UF 4.3% 4.5% half-yearly 2,859,746 25,687 2,885,433 - - - -

I 61.219.000-3 Metro S.A. Chile 97.036.000-K Banco Santander Chile UF 4.7% 4.8% half-yearly 3,704,667 4,395,061 8,099,728 22,228,003 14,818,669 25,530,838 62,577,510

J 61.219.000-3 Metro S.A. Chile 97.036.000-K Banco Santander Chile UF 4.5% 4.5% half-yearly 5,693,761 3,812,991 9,506,752 22,875,208 15,251,963 68,300,263 106,427,434

K 61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile UF 3.8% 4.0% half-yearly - 245,563 245,563 - - 145,254,591 145,254,591

L 61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile UF 3.9% 3.8% maturity 622,553 - 622,553 - - 42,592,016 42,592,016

M 61.219.000-3 Metro S.A. Chile 97.080.000-K Banco Bice Chile UF 2.9% 2.5% half-yearly - 225,971 225,971 - - 116,663,109 116,663,109

61.219.000-3 Metro S.A. Chile Deutsche Bank T USA USD 4.8% 4.9% maturity - 3,203,987 3,203,987 - 422,998,888 - 422,998,888

61.219.000-3 Metro S.A. Chile Deutsche Bank T USA USD 5.0% 5.2% maturity - 3,905,138 3,905,138 - - 412,111,472 412,111,472

Total 28,987,068 34,286,738 63,273,806 163,973,320 587,852,924 1,008,261,962 1,760,088,206

Current Non-current

Maturity Maturity

Series Name CountryCurrency

The Company’s domestic and foreign bonds as of 12-31-2019 (on an accrual basis).

Total current Total non-current

Tax ID No.: Country Tax ID No.: Banco RTB (*) Nominal Nominal Type of Up to 90 days 90 days - 1 year 12-31-2019 1 to 3 years 3 to 5 years Over 5 years 12-31-2019

Debtor Debtor Bank and payer rate effective Amortization ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$ ThCh$

A 61.219.000-3 Metro S.A. Chile 97.080.000-K Banco Bice Chile UF 5.6% 6.3% half-yearly 5,092,483 2,972,544 8,065,027 28,239,165 32,697,981 14,473,784 75,410,930

B 61.219.000-3 Metro S.A. Chile 97.080.000-K Banco Bice Chile UF 5.6% 5.9% half-yearly 1,486,272 1,869,394 3,355,666 14,119,583 16,348,990 7,653,946 38,122,519

C 61.219.000-3 Metro S.A. Chile 97.080.000-K Banco Bice Chile UF 5.5% 5.5% half-yearly 4,956,080 2,830,994 7,787,074 16,985,964 31,140,934 31,077,357 79,204,255

D 61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile UF 5.5% 5.1% half-yearly 5,097,752 2,830,994 7,928,746 16,985,964 21,232,455 48,292,902 86,511,321

E 61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile UF 5.5% 4.9% half-yearly 1,321,131 2,430,553 3,751,684 11,890,175 11,394,751 40,049,727 63,334,653

F 61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile UF 5.5% 5.0% half-yearly 2,018,055 896,482 2,914,537 8,068,333 5,378,889 30,762,662 44,209,884

G 61.219.000-3 Metro S.A. Chile 97.080.000-K Banco Bice Chile UF 4.5% 3.1% half-yearly 2,221,373 1,321,130 3,542,503 10,569,045 7,926,783 53,171,648 71,667,476

H 61.219.000-3 Metro S.A. Chile 97.036.000-K Banco Santander Chile UF 4.3% 4.5% half-yearly 2,942,077 2,830,994 5,773,071 - - - -

I 61.219.000-3 Metro S.A. Chile 97.036.000-K Banco Santander Chile UF 4.7% 4.8% half-yearly 5,238,793 3,667,420 8,906,213 22,004,522 14,669,682 28,925,476 65,599,680

J 61.219.000-3 Metro S.A. Chile 97.036.000-K Banco Santander Chile UF 4.5% 4.5% half-yearly 3,774,655 4,376,610 8,151,265 22,647,929 15,098,620 67,605,254 105,351,803

K 61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile UF 3.8% 4.0% half-yearly 1,610,499 - 1,610,499 - - 143,722,122 143,722,122

L 61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile UF 3.9% 3.8% maturity - 211,430 211,430 - - 42,159,452 42,159,452

M 61.219.000-3 Metro S.A. Chile 97.080.000-K Banco Bice Chile UF 2.9% 2.5% half-yearly 998,044 - 998,044 - - 115,547,302 115,547,302

61.219.000-3 Metro S.A. Chile Deutsche Bank T USA USD 4.8% 4.9% maturity 7,261,218 - 7,261,218 - - 371,574,642 371,574,642

61.219.000-3 Metro S.A. Chile Deutsche Bank T USA USD 5.0% 5.2% maturity 8,111,350 - 8,111,350 - - 362,113,270 362,113,270

Total 52,129,782 26,238,545 78,368,327 151,510,680 155,889,085 1,357,129,544 1,664,529,309

Current Non-current

Maturity Maturity

Series Name CountryCurrency

(*) RTB: Representative of Bondholders.

51


On July 31, 2001, December 5, 2001, August 9, 2002, December 3, 2003, June 23, 2004 and

September 14, 2005, the Company issued Series A to G bonds in the domestic market, all

calculated on the basis of a 360-day year, at a 25-year term with 10 years of grace period for the

principal payment, with half-yearly interest payments and without early redemption.

On September 3, 2008, the Company placed Series H and I bonds in the domestic market,

calculated on the basis of a 360-day year, with a 12-year term and 7 years of grace period for

series H and a 21-year term with 10 years of grace period for Series I, with half-yearly interest

payments and early redemption.

On November 18, 2009, the Company placed Series J bonds in the domestic market, calculated on

the basis of a 360-day year, at a 25-year term with 10 years of grace period, with half-yearly

payment of interest and without early redemption.

On October 6, 2011, the Company placed series K bonds in the domestic market, calculated on the

basis of a 360-day year, at a 21-year term with 16 years of grace period for principal payment, with

half-yearly interest payments and allowing early redemption.

On May 24, 2012, the Company placed Series L bonds in the domestic market, calculated on the

basis of a 360-day year, at a 21-year term with 21 years of grace period for principal payment, with

payment of half-yearly interest and allowing early redemption.

On February 4, 2014, the Company placed a bond in the international market for

MUS$500 with a 4.846% interest rate for placement. The bond’s coupon rate is 4.75%, calculated on

the basis of a 360-day year, at 10-year term with 10 years of grace period for principal payment, with

payment of half-yearly interest and allowing early redemption.

On September 29, 2016, the Company issued Series M bonds in the domestic market, calculated

on the basis of a 360-day year, at a 30-year term with 26 years of grace period for principal

payment, with payment of half-yearly interest and allowing early redemption.

On January 25, 2017, the Company placed a bond in the international market for

MUS$500 with a 5.151% interest rate for placement. The bond’s coupon rate is 5.00%, calculated

on the basis of a 360-day year, at 30-year term with 30 years of grace period for principal payment,

with payment of half-yearly interest and allowing early redemption.

The Series A and B bonds are guaranteed by the State, in accordance with Law Decree 1,263 and

Laws No, 18,196, 18,382 and 19,702, in Exempt Decree 117 issued by the Ministries of Finance and

Economy and of Development and Reconstruction, and Supreme Decree 389 issued by the Ministry

of Finance, both on April 20, 2001.

52


The Series C bonds are guaranteed by the State, in accordance with Law Decree 1,263 and Laws

No, 18,196, 18,382 and 19,774, in Exempt Decree 274 issued by the Ministries of Finance and

Economy and of Development and Reconstruction, and Supreme Decree 363 issued by the Ministry

of Finance, both on May 13, 2002.

The Series D and E bonds are guaranteed by the State, in accordance with Law Decree 1,263 and

Laws No, 18,196, and 19,847, in Exempt Decree 222 dated April 29, 2003 issued by the Ministries of

Finance and Economy and of Development and Reconstruction, and Supreme Decree 356 issued by

the Ministry of Finance, on May 7, 2003.

The Series F bonds are guaranteed by the State, in accordance with Law Decree 1,263 and Laws

No, 18,196 and 19,847. The authorization to issue and guarantee bonds in the domestic market was

authorized by Supreme Decree 1,024, dated November 11, 2003 issued by the Ministries of Finance

and Economy and of Development and Reconstruction.

The Series G bonds are guaranteed by the State, in accordance with Law Decree 1,263 and Laws

No, 18,196 and 19,847. The authorization to issue and guarantee bonds in the domestic market was

authorized by Supreme Decree 592, dated May 11, 2005 issued by the Ministries of Finance and

Economy and of Development and Reconstruction.

The Series H, I, J, K, L, M and International bonds are not guaranteed, notwithstanding the

creditors’ general pledge right set forth in Chilean law.

The Company is not subject to any financial or other restrictive covenants under the instruments

governing its Series A to G bonds. For the Series H, I, J, K and L bonds, the Company is required

during each calendar year to maintain a debt/equity ratio that is lower than 1,7, equity in excess of

ThCh$700 million and an interest coverage ratio greater than 1.0. Those covenants are calculated

and determined using the consolidated financial statements prepared as of December 31 of each

calendar year and presented to the CMF. International bonds are not subject to related restrictions

or covenants.

Series M bonds require in each calendar year a debt to equity ratio equal to or less than 1.70 times

and a minimum equity of ThCh$700 million.

Those covenants are calculated and determined using the consolidated financial statements

prepared as of December 31 of each calendar year and presented to the CMF. International bonds

are not subject to related restrictions or covenants.

53


Expected liquidity analysis (by maturity) Derivative liabilities as of 03-31-2020

Total, current

Currency Nominal Type Up to 90 days 90 days - 1 year 03-31-2020

rate Amortization ThCh$ ThCh$ ThCh$

61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile UF 3.66% maturity - 117,922 117,922

61.219.000-3 Metro S.A. Chile 97.032.000-8 Bilbao Vizcaya Argentaria Chile UF 3.59% maturity - 115,006 115,006

61.219.000-3 Metro S.A. Chile 97.036.000-K Banco Santander Chile UF 3.51% maturity - 109,201 109,201





61.219.000-3 Metro S.A. Chile 97.032.000-8 Bilbao Vizcaya Argentaria Chile UF 3.50% maturity - 110,618 110,618



61.219.000-3 Metro S.A. Chile 59.046.320-5 BNP Paribas France USD 1.56% half-yearly - 421 421

Total - 1,111,461 1,111,461

Current

Maturity

Tax ID No.: Name Country Tax ID No.: Name Country

Derivative liabilities as of 12-31-2019

Total, current

Currency Nominal Type Up to 90 days 90 days - 1 year 12-31-2019

rate Amortization ThCh$ ThCh$ ThCh$

61.219.000-3 Metro S.A. Chile 97.004.000-5 Banco de Chile Chile UF 3.66% maturity 304,349 - 304,349

61.219.000-3 Metro S.A. Chile 97.032.000-8 Bilbao Vizcaya Argentaria Chile UF 3.59% maturity 296,823 - 296,823

61.219.000-3 Metro S.A. Chile 97.036.000-K Banco Santander Chile UF 3.51% maturity 281,841 - 281,841





61.219.000-3 Metro S.A. Chile 97.032.000-8 Bilbao Vizcaya Argentaria Chile UF 3.50% maturity 285,497 - 285,497



61.219.000-3 Metro S.A. Chile 59.046.320-5 BNP Paribas France USD 1.56% half-yearly 46,026 - 46,026

Total 2,913,543 - 2,913,543

Current

Maturity

Tax ID No.: Name Country Tax ID No.: Name Country

54


Forward Fair value

Maturity Total, current

Tax ID No. : Name Country

Tax ID No. : Name Country Currency Notional Up to 90 days

90 days - 1 year 12-31-2019

amount ThCh$ ThCh$ ThCh$

61.219.000-3 Metro S.A. Chile 97.036.000-K Banco Santander Chile USD 12,500,000.00 225,500 - 225,500


61.219.000-3 Metro S.A. Chile 97.018.000-1 Banco Scotiabank Chile USD 947,665.77 16,556 - 16,556

61.219.000-3 Metro S.A. Chile 97.018.000-1 Banco Scotiabank Chile USD 3,244,671.56 - 57,625 57,625





61.219.000-3 Metro S.A. Chile 97.036.000-K Banco Santander Chile USD 1,271,201.34 - 21,153 21,153

Total 76,479,501.45 327,556 962,391 1,289,947

Rollforward of financial liabilities derived from financing activities.

Item Balance as of 12-31-2019

Cash flows from financing activities

Changes that have no effect on cash flow from financing

activities Balance as of 03-31-2020

From Used Exchange

rate differences

Other

Interest-bearing loans 479,081,476 - (811,488) 65,850,411 6,025,536 55,145,935

Bonds 1,742,897,636 - (46,942,100) 111,982,715 15,423,761 1,823,362,012

Derivative transactions 4,203,490 - (3,535,830) (1,289,947) 1,736,748 1,111,461

Other 2,746 - - - - 2,746

Total 2,226,185,348 - (51,292,418) 176,543,179 23,186,046 2,374,622,154

13. Other non-financial liabilities, current and non-current

Other current and non-current non-financial liabilities are detailed below:

Current 03-31-2020 12-31-2019

ThCh$ ThCh$

Real estate tax 7,234,173 5,950,106

Deferred income (*) 1,443,006 824,165

Deferred advertising income (**) 6,320,237 6,256,693

Guarantees received 3,360,678 1,469,376

Total 18,358,094 14,500,340

Non-current 03-31-2020 12-31-2019

ThCh$ ThCh$

Deferred income (*) 2,806,345 2,838,235

Deferred advertising income (**) 46,495,754 46,925,199

Total 49,302,099 49,763,434

(*) Corresponds to advances on operating leases.

(**) Effective as of July 1, 2018, a contract was made with Massiva S.A., lasting a period of

10 years, which establishes a minimum annual guaranteed income (MAG) payable

during the term of the contract.

55


14. Balances and transactions with related parties

Documents and accounts receivable:

As of March 31, 2020 and as of December 31, 2019, the Company records no outstanding balances

of receivables from related parties.

Documents and accounts payable:

These are contributions received from the Government of Chile for network expansion projects. As of

March 31, 2020, contributions pending capitalization amounted to ThCh$42,515,130

(ThCh$ 22,515,130 in 2019).

Transactions:

The Company received ThCh$20,000,000 in contributions from the Chilean Treasury in the first quarter

of 2020 and contributions of ThCh$17,308 in the first quarter of 2019.

The outstanding balance to be capitalized amounts to ThCh $ 42,515,130 as of March 31, 2020, and

consists of contributions received during the years 2019 and 2018.

As detailed in Note 12 to the financial statements, the Chilean Treasury is guarantor of certain bank

loans and bonds issued by the Company.

Key management personnel

The key personnel of Metro S.A. are those persons with authority and responsibility for planning,

directing and controlling the entity’s activities. The Company has determined that the key management

personnel are the Directors, General Manager and Managers of the Company’s different areas (principal

executives).

56


The expense for compensation received by key management personnel is detailed as follows:

Directors' income are as follows:

01-01-2020 01-01-2019

03-31-2020 03-31-2019

ThCh$ ThCh$

Fixed remuneration 51,623 50,923

Total 51,623 50,923

Directors' income

Board of Directors' expenses

During the first quarter of 2020 and 2019, there were no airplane ticket expenses.

During the first quarter of 2020 and 2019, there were no travel and lodging expenses.

Remunerations of the General Manager and Other Managers:

During the first quarter of 2020, the compensation paid to the General Manager was ThCh$91,977

(ThCh$100,325 as of March 2019) and compensation paid to Other Managers (20 most senior

executives) was ThCh$972,134 (ThCh$1,218,461 paid to the 18 most senior executives as of March

2019).

15. Trade and other payables


Current Liabilities 03-31-2020 12-31-2019

ThCh$ ThCh$

Debts for purchases or services received 80,557,624 66,647,224

Accounts payable to Transantiago system 2,498,995 6,857,044

Withholdings 1,193,838 3,638,385

Supplier of property, plant and equipment 33,668,260 32,532,904

Megaproject contract withholding 1,902,828 1,825,616

Other payables 748,759 777,788

Accounts payable to AVO (Americo Vespucio Oriente) 233,085 233,085

Total 120,803,389 112,512,046

Non-Current Liabilities 03-31-2020 12-31-2019

ThCh$ ThCh$

Accounts payable to AVO (Americo Vespucio Oriente) 1,364,539 1,424,782

Total 1,364,539 1,424,782

Metro S.A. Has been given a Propyme seal. The Pro Pyme Seal was created in the Ministry of

Economy, Development and Tourism in order to guarantee better conditions for small-sized

companies in the country.

The seal is a recognition given to large entities provided that they pay their small-sized suppliers

within a maximum period of 30 consecutive days.

57


16. Segment information

The Company reports segment information in accordance with IFRS 8 "Operating Segments". IFRS 8

stipulates that this Standard must be applied by entities with capital stock or debt securities which are

publicly traded or by entities that are in the process of issuing securities to be traded in public

markets.

Metro S.A. is a corporation that must follow the rules for publicly-traded corporations in Chile. Its

corporate purpose is to carry out all the activities associated with passenger transportation in

metropolitan trains or other supplementary electrical systems, and surface transportation by bus or

vehicles of any technology, as well as activities that supplement this line of business. In this regard,

the Company may incorporate, or have an interest in, companies, and carry out any act or operation

related to its line of business, whose main income corresponds to the transportation of passengers.

Services are provided using a common technological and administrative infrastructure. The current

activities consist in the provision of services in a national environment, and have a common

environment in terms of economic and political conditions.

The Company manages its operations and presents its financial information as one single operating

segment: transportation of passengers in the city of Santiago, Chile, considering that all other areas of

business are derived from this main line of business.

17. Employee benefits

Current

Item 03-31-2020 12-31-2019

ThCh$ ThCh$

Accrued vacations 4,227,468 4,491,350

Employee benefit obligations 1,817,884 2,588,848

Production bonus obligations 1,875,445 7,393,193

Total 7,920,797 14,473,391

Non-current

Item 03-31-2020 12-31-2019

ThCh$ ThCh$

Provision for terminations of employment contracts 14,454,763 14,250,051

Provision for resignations 39,033 40,274

Provision for mortality 575,802 591,710

Advance for severance indemnity payments (1,818,394) (1,794,794)

Total 13,251,204 13,087,241

58

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIODS ENDED

MARCH 31, 2020 AND 2019 AND DECEMBER 31, 2019

Movements in severance indemnity payments for the period ended March 31, 2020 and 2019 are

detailed as follows:

Item ThCh$

Liabilities as of 01-01-2020 13,087,241

Service interest 121,407

Benefits paid -

Actuarial profit (loss) 42,556


Item ThCh$


Service interest 612,610

Benefits paid (922,616)

Actuarial profit (loss) 600,013


Sensitivity analysis

Reasonable possible changes in the relevant actuarial assumptions at the reporting date, provided

that other assumptions remain constant, would have affected the defined benefit obligation by the

following amounts:

2020

Items Increase Base Decrease Increase Decrease

ThCh$ ThCh$

Discount rates (change of 0.5) 4.140% 3.640% 3.140% 13,163,232 13,342,592

Increase in salary (change of 0.5) 4.530% 4.030% 3.530% 13,492,605 13,018,056

Labor turnover (25% change) 1.813% 1.450% 1.088% 13,232,534 13,270,554

Mortality rate (25% change) 25.00% CB14 and RV14 -25.00% 13,240,321 13,262,193

2019

Items Increase Base Decrease Increase Decrease

ThCh$ ThCh$

Discount rates (change of 0.5) 4.210% 3.710% 3.210% 12,982,098 13,180,474

Increase in salary (change of 0.5) 4.530% 4.030% 3.530% 13,336,117 12,846,940

Labor turnover (25% change) 1.813% 1.450% 1.088% 13,068,739 13,106,420

Mortality rate (25% change) 25.00% CB14 and RV14 -25.00% 13,075,886 13,098,716

Projection of the actuarial calculation for the following year:

The projected calculation for the following year is ThCh$13,711,394.

Estimate of expected cash flows for the following year:

The Company estimates that for the following years there will be expected payment flows for

obligations on a monthly average of ThCh$59,881 as of March 31, 2020 (ThCh$104.418 as of March

31, 2019).

59


General considerations

The Company has benefits that are agreed upon with its active employees and frozen severance

indemnity payments, which require actuarial valuation and it has collective agreements, which include

benefits for the concept of termination, voluntary retirement and death of an employee. In agreements

with its unions, the Company froze the benefits accrued by employees on different dates.

Frozen severance:

Frozen indemnity corresponds to the severance benefits established in the respective collective

agreements of the Company. The benefit is based on the various reasons for termination of the

employment contract, such as on employee’s resignation and death.

The freezing dates established in the agreements are May 31, 2002, August 31, 2003 and November

30, 2003, depending on the union and the reason for the termination.

Actuarial assumptions:

Actuarial assumptions are long-term assumptions and, should there be sufficient substantive evidence,

they must be updated.

1. Mortality:

The CB-H-2014 men and RV-M-2014 women's mortality tables established by the Chilean

Superintendency of Pensions and Financial Market Commission were used.

2. Employee turnover:

The turnover tables were prepared using information available in the Company. Constant ratios

may be observed in the following table:

Reason Rate %

Dismissal 1.26

Resignation 0.12

Other 0.07

60


3. Discount rate:

The real annual discount rates used for each year are as follows:

4. Termination:

The estimated maximum average termination ages are:

Employee Age

Women 62 years

Men 68 years

18. Income tax

The Company had a negative first category (corporate) tax base of

ThCh$1,554,630,993 as of March 2020, of ThCh$1,369,910,339 as of December 2019, and of

ThCh$1,144,144,319 as of March 2019, determined in accordance with current legal provisions;

therefore no income tax provision has been recognized as of these dates.

Because the Company has consistently recorded tax losses since the 1996 taxable year, the

Company considers that it is unlikely that there will be sufficient future taxable profits to allow it to

reverse the deferred tax assets; therefore these have been recognized up to the amount of deferred

tax liabilities(1).

Tax assets Tax liabilities

Temporary Difference 03-31-2020 12-31-2019 03-31-2020 12-31-2019 ThCh$ ThCh$ ThCh$ ThCh$

Provision for impairment of accounts receivable 167,478 163,471 - -

Deferred revenue 1,062,338 915,600 - -

Accrued vacations 1,056,867 1,122,837 - -

Severance indemnity 1,311,093 1,290,228 - -

Provision for lawsuits 102,171 155,953 - -

Maintenance provision 3,346,876 2,511,853 - -

Provision for employee benefits 454,471 647,212 - -

Provision for spare parts 660,967 660,967 - -

Irrecoverable VAT credit for extensions - - 32,650,768 32,295,517

Capitalized expenses - - 66,479,289 63,986,473

Property, plant and equipment 174,311,496 156,558,336 - -

Tax loss 388,657,748 342,477,585 - -

Other 3,055,543 2,893,020 - -

Subtotal 574,187,048 509,397,062 99,130,057 96,281,990

Deferred tax assets, net 475,056,991 413,115,072 - -

Reduction of deferred tax assets (1) (475,056,991) (413,115,072) - -

Deferred taxes, net - - - -

Year Rate %

12-31-2019 3.71

03-31-2020 3.64

61


19. Provisions, contingencies and guarantees

As of March 31, 2020 and 2019, the Company is involved in legal proceedings (civil and labor), which

include subsidiary lawsuits, which are not provisioned because of the application of IAS 37, due to the

remote probability of unfavorable judgment.

The amount of the provision for lawsuit is as follows:

Other short-term provisions 03-31-2020 12-31-2019

ThCh$ ThCh$

Provision for lawsuits 408,682 623,810

Total 408,682 623,810

According to the current status of legal proceedings, Management believes those provisions recorded

in the Interim Consolidated Financial Statements properly cover the risks associated with the litigation,

which are not expected to generate any additional liabilities.

Considering the risk’s characteristics that these provisions cover, it is impossible to determine a

reasonable payment schedule.

Movements of provisions are as follows:

Item Amount

ThCh$

Balances as of 01-01-2019 795,662

Accrued provisions 583,674

Cash payments (755,526)

Balances as of 12-31-2019 623,810

Accrued provisions 495,358

Cash payments (710,486)

Balances as of 03-31-2020 408,682

62


Direct guarantees

The guarantees granted by the Company are in UF, expressed in thousands of Chilean pesos as of

March 31, 2020. They are according to the following detail.

Type of No. of Issuing Currency Amount Beneficiary

Date Date Status

Rate

guarantee guarantee entity entity maturity ThCh$

Bank Guarantee 168873 Banco Scotiabank UF 10,000.00 San Juan S.A. 03-08-2019 04-01-2020 Valid 285,975

Bank Guarantee 4439142 Banco Santander UF 5,000.00 Subsecretaría de Transportes 07-01-2019 08-10-2020 Valid 142,987











Bank Guarantee 4403310 Banco Santander UF 10,000.00 Enel Distribuidora S.A. 10-17-2019 11-17-2020 Valid 285,975

Bank Guarantee 5279190 Banco Santander UF 1,128.00 Director Gral de Concesiones de O. Publicas 11-06-2019 12-31-2020 Valid 32,258

Bank Guarantee 4403312 Banco Santander UF 22,500.00 Pelicano Solar Company SpA 10-17-2019 12-31-2020 Valid 643,443

Bank Guarantee 537164 BCI UF 10,000.00 San Juan S.A. 03-24-2020 04-01-2021 Valid 285,975

Bank Guarantee 5760260 Banco Santander UF 13,071.63 Junaeb 03-23-2020 06-30-2022 Valid 373,815

Bank Guarantee 4437905 Banco Santander UF 19,607.45 Junaeb 05-30-2019 06-30-2022 Valid 560,723

As of the closing date of the Interim Consolidated Financial Statements, there are no balances

pending payment, since they are Performance Guarantees.

20. Changes in equity

2019 Capital increase

At the Extraordinary Shareholders' Meeting held on December 30, 2019, the shareholders of the

Company agreed to:

Increase the Company’s share capital by capitalizing government contributions of

ThCh$160,017,309 at a nominal value, intended for financing Lines 2 and 3 extensions and

projects to improve the Metro Transportation System as well as for debt service, through the

issuance of 6,045,232,679 Series A shares subscribed and fully-paid by the Government and

CORFO pro rata of their ownership percentage.

On November 19, 2019, CORFO paid the government contributions signed on September 27, 2019.

At the Extraordinary Shareholders' Meeting held on September 27, 2019, the shareholders of the

Company agreed to:

Increase the Company’s share capital by capitalizing government contributions of

ThCh$96,614,721 at a nominal value, through the issuance of 3,427,269,280 Series A shares

which CORFO will subscribe and pay in on December 31, 2019 at the latest.

63


a. Capital

As of March 31, 2020 and December 31, 2019 the capital of the Company is represented by

89,644,733,903 and 19,163,677,063 Series A and B nominative shares with no par value,

respectively, with 72,831,425,394 shares corresponding to CORFO and 35,976,985,572 to the

Chilean Government.

Series A shares correspond to the initial capital and capital increases that are subscribed and paid

by the Government and CORFO and cannot be disposed of. Series B shares correspond to capital

increases that could allow the incorporation of other shareholders.

Shareholders are detailed as follows:

Shareholders

03-31-2020 12-31-2019

Number of shares and percentages

Paid-in shares

Ownership %

Paid-in shares

Ownership %

Corporación de Fomento de la Producción 72,831,425,394 66.94% 72,831,425,394 66.94%

Chilean Treasury - Ministry of Finance 35,976,985,572 33.06% 35,976,985,572 33.06%

Total 108,808,410,966 - 108,808,410,966 -

Corporación de Fomento de la Producción

Series A 60,727,954,088 - 60,727,954,088 -

Series B 12,103,471,306 - 12,103,471,306 -

Total 72,831,425,394 - 72,831,425,394 -

Chilean Treasury - Ministry of Finance

Series A 28,916,779,815 - 28,916,779,815 -

Series B 7,060,205,757 - 7,060,205,757 -

Total 35,976,985,572 - 35,976,985,572 -

64



b. Distribution of net income and dividends

The Company's dividend policy is consistent with current legislation according to which at least

30% of net profits for the year must be distributed as cash dividends, unless otherwise resolved by

the Shareholders' Meeting by the unanimous vote of the outstanding shares issued.

At the Ordinary Shareholders' Meeting held on April 28, 2020, the shareholders resolved not to

distribute net income or dividends.

Since the Company earned no profits, the shareholders agree not to withdraw dividends and

reiterate that the Company's policy in this matter follows the provisions in the Company's by-laws

and in the Chilean corporation law.

c. Non-controlling interests

Non-controlling interests correspond to the recognition by the Company of the share in the equity

and net income of its subsidiary not directly or indirectly attributable to the Company. The detail for

periods ended as of March 31, 2020 and 2019, respectively, is as follows:

Subsidiary

Percentage Non-controlling interest Share of profit or loss

Non-controlling interest equity income (expense)

2020 2019 2020 2019 2020 2019

% % ThCh$ ThCh$ ThCh$ ThCh$

Transub S.A. 33.33 33.33 (10,645) (10,645)

d. Other reserves

Other reserves are composed of revaluation of paid-in capital for the year of transition to IFRS,

revaluation surplus (first-time adoption) of land and adjustments originating from the exception in

IFRS accounting standards, as reiterated in Ruling 456 issued by the Financial Market

Commission:

The cash flow hedge reserve arises from the application of hedge accounting on certain financial

assets and liabilities. The purpose of this reserve is to affect the profit or loss when the hedged

item records effects thereto.

Other reserves 03-31-2020 12-31-2019

ThCh$ ThCh$

Price-level restatement of paid-in capital 30,336,377 30,336,377

Revaluation surplus 3,042,584 3,042,584

Actuarial (loss) on defined benefit plans (642,569) (600,013)

Cash flow hedges 1,952,571 (10,228,760)

Total 34,688,963 22,550,188

Additional and supplementary information is presented in the Interim Consolidated Statement of

Changes in Net Equity.

65



21. Income and expenses

Revenue:

For the periods ended as of March 31, 2020 and 2019, revenue is detailed as follows:

01-01-2020 01-01-2019

Revenue 03-31-2020 03-31-2019

ThCh$ ThCh$

Revenue from passenger transportation services 62,307,089 82,075,503

Sales channel income 7,906,478 11,433,273

Lease of commercial stores, and commercial and advertising spaces 3,714,676 4,175,394

Lease in inter-modal terminals 336,724 462,539

Lease of spaces for telephone and fiber optic antennas 1,899,083 1,753,933

Lease of land 204,660 198,798

Advisory services - 45,640

Other 106,682 3,734

Total 76,475,392 100,218,814

Other income, by function

For the periods ended March 31, 2020 and 2019, other income by function is detailed as follows:

Other income by function

01-01-2020 01-01-2019

03-31-2020 03-31-2019

ThCh$ ThCh$

Income from fines and indemnities 578,735 11,320,402

Funding for welfare costs 135,957 141,049

Sale of proposals 6,300 6,234

Other income 1,603,871 2,066,959

Total 2,324,863 13,534,644

Operating income

The operating income in XBRL format (common electronic format for business reporting) for the periods

ended March 31, 2020 and 2019, is as follows:

Operating income

01-01-2020 01-01-2019

03-31-2020 03-31-2019

ThCh$ ThCh$

Revenue 76,475,392 100,218,814

Cost of sales (96,288,825) (92,923,425)

Gross profit (19,813,433) 7,295,389

Other income 2,324,863 13,534,644

Administrative expenses (8,604,002) (8,891,393)

Other expenses by function (1,054,128) (534,750)

Other income (expenses) (1,262,187) 20,250

Profit (loss) from operating activities (28,408,887) 11,424,140

66


Expenses by nature:

The following is the detail of cost of sales, administrative expenses and other expenses by function for

the periods ended as of March 31, 2020 and 2019:

Expenses by nature

01-01-2020 01-01-2019

03-31-2020 03-31-2019

ThCh$ ThCh$

Employee expenses 23,415,776 22,483,696

Operation and maintenance expenses 25,244,308 19,757,456

Purchase of energy 15,020,113 15,414,854

General and other expenses 11,982,012 15,318,804

Other expenses by function 1,054,128 534,750

Depreciation and amortization 29,230,618 28,840,008

Total 105,946,955 102,349,568

Personnel expenses:

For the periods ended March 31, 2020 and 2019, this item is detailed as follows:

Employee expenses

01-01-2020 01-01-2019

03-31-2020 03-31-2019

ThCh$ ThCh$

Salaries and wages 16,354,042 16,577,608

Other Benefits 5,450,270 4,030,487

Expenses for social security and collective bargaining benefits 519,061 902,695

Social security contribution 1,092,403 972,906

Total 23,415,776 22,483,696

Maintenance and operating expenses:


Operation and maintenance expenses

01-01-2020 01-01-2019

03-31-2020 03-31-2019

ThCh$ ThCh$

Maintenance of rolling stock, stations and other 21,250,758 15,417,147

Spare parts and materials 2,881,670 3,154,563

Repairs, leases and other 1,111,880 1,185,746

Total 25,244,308 19,757,456

67


General and other expenses:


General expenses

01-01-2020 01-01-2019

03-31-2020 03-31-2019

ThCh$ ThCh$

Service contracts 5,815,022 7,354,209

Real estate taxes 1,276,156 1,342,449

Corporate image expenses 128,400 508,667

Sales channel operator expense 4,203,389 5,372,352

Insurance, materials and other 559,045 741,127

Total 11,982,012 15,318,804

Other expenses by function:


Other expenses by function

01-01-2020 01-01-2019

03-31-2020 03-31-2019

ThCh$ ThCh$

Disposals of PPE in period 30 4,815

Inventories disposals 1,150 16,101

Fines and Compensation 286,137 445,877

Reconstruction services contracts 166,462 -

Other expenses 600,349 67,957

Total 1,054,128 534,750

Depreciation and amortization:


Depreciation, amortization

01-01-2020 01-01-2019

03-31-2020 03-31-2019

ThCh$ ThCh$

Depreciation 29,020,899 28,716,216

Amortization 209,719 123,792

Total 29,230,618 28,840,008

68


Financial income/costs results and exchange differences:

The Company's financial income/costs results and exchange differences for the periods ended March

31, 2020 and 2019, are detailed as follows:

Financial profit or loss

01-01-2020 01-01-2019

03-31-2020 03-31-2019

ThCh$ ThCh$

Finance income

Interest from cash and cash equivalents 1,180,591 2,275,024

Finance income from swaps 1,484,850 520,810

Other finance income 61,967 67,667

Subtotal 2,727,408 2,863,501

Finance expenses

Interest and expenses on bank loans (4,767,808) (4,711,506)

Bond interest and expenses (16,493,175) (14,806,712)

Other financial costs (682,522) (603,808)

Subtotal (21,943,505) (20,122,026)

Profit (loss) from financial result (19,216,097) (17,258,525)

Foreign currency translation and indexation units

01-01-2020 01-01-2019

03-31-2020 03-31-2019

ThCh$ ThCh$

Foreign currency translation difference

Profit (loss) from exchange differences (foreign loans, bonds, swap and investments)

(135,279,928) 22,488,857

Total foreign currency translation difference (135,279,928) 22,488,857

Indexation units

Profit (loss) from Indexation unit (bonds) (9,637,080) (693,449)

Total indexation units (9,637,080) (693,449)

69



Other profit (losses):

Other Company’s profit (losses) for the periods ended March 31, 2020 and 2019, are detailed as

follows:

Other income (expenses)

01-01-2020 01-01-2019

03-31-2020 03-31-2019

ThCh$ ThCh$

Net present value of swap (1,262,187) 20,250

Total (1,262,187) 20,250

Other comprehensive income:

For the periods ended as of March 31, 2020 and 2019, this item is detailed as follows:

Other comprehensive income 01-01-2020 01-01-2019

03-31-2020 03-31-2019

ThCh$ ThCh$

Actuarial loss on defined benefit plans (42,556) (95,784)

Profit (loss) on cash flow hedges 12,181,331 (1,205,094)

Total 12,138,775 (1,300,878)

70



22. Third-party guarantees

Guarantees received as of December 31, 2018, are detailed as follows:

Grantor Guarantee

amount

Underlying Relationship

ThCh$ Operation

Abengoa Chile S.A. 72,563,144 Services contract Supplier

Alstom Chile S.A. 534,186,834 Services contract Supplier

Alstom Transport S.A. 93,631,814 Services contract Supplier

Arrigoni Proyectos Especiales 6,901,255 Services contract Supplier

Besalco Dragados S.A. 70,391,159 Services contract Supplier

CAF Chile S.A. 991,599,737 Services contract Supplier

China Railway Tunnel GR.CO. Ltda. 40,122,349 Services contract Supplier

Colas Rail 4,186,272 Services contract Supplier

Colas Rail Establecimiento Permanente 21,601,869 Services contract Supplier

Compañía Americana de Multiservicios 5,737,743 Services contract Supplier

Construcciones Piques y Túneles 3,610,847 Services contract Supplier

Consorcio EI-OSSA S.A. 107,077,103 Works contract Supplier

Construcción y Auxiliar de Ferrocarril 41,994,327 Works contract Supplier

Construcciones Especializadas 6,930,738 Works contract Supplier

ETF 13,009,123 Services contract Supplier

ETF Agencia en Chile 110,225,237 Services contract Supplier

Eurocorp Dos S.A. 14,081,597 Services contract Supplier

Faiveley Transport Far East 4,475,812 Services contract Supplier

Ferrostal Chile S.A. 4,613,337 Services contract Supplier

Ferrovial Agroman Chile S.A. 10,834,119 Services contract Supplier

Gabriela De Las Nieves Ramirez 14,301,075 Services contract Supplier

IDOM Consulting, Engineering, Architecture

S.A

5,216,785 Services contract Supplier

ISS Servicios Integrales Limitada 3,140,620 Services contract Supplier

Obrascon Huarte Laín 36,972,737 Services contract Supplier

OFC SpA 19,271,845 Services contract Supplier

Piques y Tuneles S.A. 3,286,069 Services contract Supplier

Servicios de Aseo y Jardines Maclean 3,177,157 Services contract Supplier

Servicios de Respaldo de Energía Teknica

Ltda.


Sice Agencia Chile S.A. 75,544,140 Services contract Supplier

Sociedad de Mantención e Instalaciones

Técnicas


Soler y Palau S.A. 41,892,570 Services contract Supplier

Systra Agencia en Chile 5,034,470 Services contract Supplier

Thales Canadá INC. 16,553,911 Services contract Supplier

Thales International Chile Ltda. 3,536,540 Services contract Supplier

Thyssenkrupp Elevadores S.A. 41,255,093 Services contract Supplier

Other 91,157,776 Services contract Supplier

TOTAL 2,526,561,562

71



23. Risk management policies

The Company is exposed to several risks which are inherent to the activities that are carried out in the

public passenger transportation services, in addition to risks of an economic and financial nature

associated with changes in market conditions or force majeure, among others.

23.1 Description of the market in which the Company operates

The main market in which the Company operates is the public transportation of passengers in the

Metropolitan Region of Santiago and is composed of users seeking a quick and safe journey.

Secondary activities to the Company's main line of business include collection of transportation

fees and sale of means of payment (Tarjeta Bip and tickets), leasing of advertising spaces, and

leasing of business premises at the network stations, among others.

Fares

On February 10, 2007, the Company became part of the Integrated Public Passenger Transport

System of Santiago (Metropolitan Mobility Network) and its fare revenue was originally based on

the effectively confirmed number of passengers transported and the technical fare established in

Exhibit 1 of the Tender Documents for the Use of the Thoroughfares of the City of Santiago.

On December 14, 2012 a Transportation Agreement was signed by the Company with the

Ministry of Transportation and Telecommunications of Chile to replace the aforementioned

Exhibit 1.

Beginning on February 11, 2019 a new transportation agreement is in force between the

Company and the Ministry of Transportation and Telecommunications of Chile, which established

a flat-rate technical fare of Ch$$480.18 per confirmed transported passenger, taking November

2018 as a base, and which is updated monthly by the indexation polynomial, included in this new

agreement, which takes into consideration changes in the variables making up the Company's

long-term cost structure (CPI, US dollar, euro, power and electric energy price. This allows for a

partial natural hedge in case of cost variations caused by an increase in certain variables making

up the polynomial.

On February 5, 2020, an amendment was made to the Transportation Agreement that took effect

on February 10, 2020. The amendment added a 12-month extension to the term of the

agreement signed in 2019, which, as a result, will be in force until February 11, 2021. In addition,

the income associated with the Inter-modal stations is established in the form of a fixed

remuneration, eliminating the associated concept from the base fare and replacing it with fixed

income quotas expressed in U.F., thus generating a new base fare of

Ch$ 478.67 per validated transported passenger, based on November 2018.

The fare paid by the public is different than the fare that the Company receives per transported

passenger. In December 2019, customers paid Ch$ 800 at peak hours, Ch$ 720 at valley hours

and Ch$640 at low hours, whereas on average the Company received a technical fare of Ch$

518.36 per passenger.

72


Beginning on July 1, 2013, the supplementary contract for issuance and post-sale of means of

access and provision of the network for sales and charge of the means of access to the Santiago

public transportation system entered into by and between the Ministry of Transportation and

Telecommunication of Chile and Metro S.A., became effective.

Demand

To date, the Company is the structuring pillar of the Integrated Public Passenger Transport

System (Metropolitan Mobility Network) and as of March 2020 reached a level of 1.62 million trips

on a business day.

The risk related to the demand of Metro passengers is mainly associated with the level of

economic activity in Chile, level of use and quality of the ground passenger transportation service

(buses). In effect, the demand for passenger transport is a demand derived from other economic

activities. As of March 2020, there is a 49.9 million drop in trips, 29.3% down compared to the

same date in 2019. The above is explained mainly by Covid-19 and the measures implemented

by the government to stop its spread, including restrictions on the free movement of people;

these measures have caused a significant decrease in the number of passengers transported by

Metro in the first quarter of 2020. Also, after the acts of violence that affected the network, which

occurred from October 2019, and as a result of the damages sustained, the Metro network is not

operating at full capacity, and as of March 31, 2020, 112 stations are operational out of a total of

136, which has also reduced the amount of transported passengers in the first months of the

year.

The coronavirus outbreak and the measures implemented in Chile to contain its spread, or the

economic damage suffered as a result of the coronavirus, have had, and will continue to have, an

impact on Metro’s business, financial position, operating results and liquidity. In particular, the

above has contributed to a general slowdown in the Chilean economy, causing a significant

reduction in the number of passengers transported by Metro in the first quarter of 2020 compared

to the same period in 2019. The foregoing may require to delay projects to some extent and to

cut costs, in order not to jeopardize the compliance of financial covenants under Metro's debt

instruments, or in order not to jeopardize the fulfillment of Metro’s obligations in general.

23.2 Financial risks

The main risks to which the Company is exposed and which arise from financial assets and

liabilities are: market risk, liquidity risk and credit risk.

In loans from financial institutions, the nominal rate is similar to the effective rate since there are

no additional transaction costs to be considered.

73



Market risk

The technical fare that the Company receives is updated monthly by the indexation polynomial

which takes into consideration changes in the variables making up the Company's long- term

cost structure (CPI, US dollar, euro, power and electric energy price). This allows for a partial

natural hedge in case of cost variations caused by an increase in certain variables making up the

polynomial.

The Company, as per its financial risk management policy, takes financial derivatives to hedge its

exposure to currency variations (exchange rate) and to inflation. Currency derivatives are used to

set the exchange rate of the US dollar against the Chilean peso (CLP) and Unidad de Fomento

(UF), in the case of investments or obligations in currencies other than the Chilean peso. These

instruments are Cross Currency Swaps, whose notional amount is MUS$ 300 as of March 31,

2020 and 2019, and which meet the hedge accounting criteria under IFRS 9 since 2019. On the

other hand, the Company maintains other derivative transactions as financial hedges against the

partial exposure to the market value of interest rates on financial obligations. These are interest

rate swaps which do not comply with the minimum requirements to qualify as accounting hedges

under IFRS 9. In addition, in accordance with its risk-hedging policy, Metro entered into six (6)

exchange rate (USD/CLP) Forward contracts for a total notional amount of MUS$ 58.3.

Particularly, the Company is exposed to two market risks, which are:

Interest rate risk

Market risks include possible changes in the Libor rate, affecting foreign borrowings obtained by

the Company at variable rates.

As of March 2020, the share of the debt at a variable rate records no major change with respect

to December 2019, as indicated in the following table:

Detail of debt 03-31-2020 12-31-2019

% %

Fixed rate 78.0 79.3

Variable rate 22.0 20.7

Total 100.0 100.0

In conducting a sensitivity analysis as of March 31, 2020 and as of December 31, 2019 on the

net debt at a variable Libor rate, not hedged by current derivatives, which amounts to MUS$592,

we note that the effect on profit or loss in a scenario where the Libor rate is increased by 100

basis points would result in an annual increase in finance expenses of MUS$6.1 as of March 31,

2020 and as of December 31, 2019.

74



Sensitivity analysis Equivalent in Total

MUS$ %

Total Debt (equivalent to MUS$) 2,764 100%

Debt at LIBOR rate 592

IRS 15

Total Debt at Variable Rate 607 22%

Total Debt at Fixed Rate 2,157 78%

Variation in Financial Expenses ThCh$ Equivalent in MUS$

Impact on financial expenses of a variation of 100 basis points in LIBOR 5,172 6.1

Exchange rate risk and inflation

The Company has obligations with financial institutions and has issued bonds in foreign markets,

agreed to in foreign currencies, to finance the extensions in the Metro network. To minimize

exchange rate risks, the Company has contracted cross currency swap (CCS) financial

derivatives and forward contracts, whose notional amounts are MUS$300 and MUS$58.3,

respectively, as of March 31, 2020.

The Company is also exposed to inflationary risk as it maintains a debt with bondholders for UF-

denominated bonds issued in the domestic market.

The following table shows the composition of the Company's debt, expressed in millions of US

dollars (current derivatives transactions are considered):

Financial Debt Structure

03-31-2020 12-31-2019

Original currency

Equivalent in MUS$

% Original currency

Equivalent in MUS$

%

Debt in UF ThUF 40,676 1,365 49% MUF 41,289 1,561 53%

Debt in USD MUS$ 1,399 1,399 51% MUS$ 1,370 1,370 47%

Total Financial Debt 2,764 100% 2,931 100%

As of March 31, 2020, the structure of the financial debt is divided into UF (49%) and US dollars

(51%).

This composition is defined by Metro's Financial Risk Hedging Policy, which seeks to mitigate the

financial risk derived from the effect of the Exchange Rate and the Interest Rates, and is intended

to ensure the capacity to generate cash flows that allow the Company to fulfill its financial

commitments.

This structure, divided by currency, is in line with Metro’s operating cash flows, in which the

indexation polynomial updates the Company's technical fare in case of changes in the US dollar

and the Consumer Price Index (CPI), in addition to other variables, which produces a partial

“natural hedge” between long-term operating cash flows and debt service.

75


When we analyze the sensitivity of the Consolidated Statement of Comprehensive Income as of

March 31, 2020, in case of a possible 5% depreciation/appreciation of the Chilean peso in

respect to the US dollar, leaving all the rest of the parameters constant, we estimate that an

unrealized loss or profit of ThCh$59,599,499 would arise, which is the accounting effect on the

principal of the US dollar-denominated debt, and not the effect on cash, because the latter is

hedged by the policy described above.

Sensitivity analysis 5% Depreciation 5% Appreciation

Effect on profit or loss as of March 2020 ThCh$ ThCh$

Impact of variation of 5% in Ch$/ USD exchange rate (59,599,499) 59,599,499

Likewise, in case of a possible appreciation of 3% of the value of UF, leaving all the rest of the

parameters constant, we estimate that an unrealized loss of ThCh$34,896,908 would arise,

which is the accounting effect on the principal of the UF-denominated debt, and not the effect on

cash, because, as in the case of the US dollar, the latter is also hedged by the Financial Risk

Hedging Policy.

Sensitivity analysis 3% Appreciation Effect on profit or loss as of March 2020 ThCh$

Impact of variation of 3% in UF 34,896,823

It is worth pointing out that the results generated by the sensitivities presented above produce

only an unrealized loss or profit in the items Exchange difference and Profit (loss) from inflation-

adjusted units. Therefore, the foregoing does not affect the objective of hedging the company's

cash flow, because, since the company has in place an indexation polynomial to update the

technical fare, the latter performs the function of a partial “natural hedge”, by mitigating the

effects in the cash flow from operating activities of the previously analyzed macroeconomic

variables, included in the polynomial, generating a hedge for Metro's cash flow.

Liquidity risk

Revenue from fares associated with Metro S.A. passenger transportation, based on the new

transport contract, are deducted daily from the funds collected by the Company's sales channel

under normal conditions of passenger transportation, generating the liquidity necessary to cover

the Company's commitments. This revenue corresponds to 81% of total revenue.

The maturity of interest-bearing debt, by terms, separated in principal and interest payable, is

detailed as follows:

Up to 1 year 1 to 3 years 3 to 5 years Over 5 years Total ThCh$ ThCh$ ThCh$ ThCh$ ThCh$

Principal 125,983,883 228,566,748 702,117,880 1,299,007,126 2,354,969,052

Interest 104,403,286 190,676,621 150,007,995 644,137,567 1,089,225,469

Total 230,387,169 419,243,369 852,125,875 1,943,144,693 3,444,194,521

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Financial liability structure

The Company’s financial debt classified by maturity (on an accrual basis) is presented as follows:

03-31-2020

Financial Liabilities Up to 1 year 1 to 3 years 3 to 5 years Over 5 years Total

ThCh$ ThCh$ ThCh$ ThCh$ ThCh$

Interest-bearing loans 87,016,143 199,756,109 130,667,509 132,706,174 550,145,935

Bonds 63,273,806 163,973,320 587,852,924 1,008,261,962 1,823,362,012

Derivative transactions 1,111,461 - - - 1,111,461

Total 151,401,410 363,729,429 718,520,433 1,140,968,136 2,374,619,408

12-31-2019

Financial Liabilities Up to 1 year 1 to 3 years 3 to 5 years Over 5 years Total ThCh$ ThCh$ ThCh$ ThCh$ ThCh$

Interest-bearing loans 71,407,756 175,551,934 115,152,239 116,969,547 479,081,476

Bonds 78,368,327 151,510,680 155,889,085 1,357,129,544 1,742,897,636

Derivative transactions 4,203,490 - - - 4,203,490

Total 153,979,573 327,062,614 271,041,324 1,474,099,091 2,226,182,602

In general, the Company's debt structure consists mainly of long-term bonds and bank loans,

which are intended to ensure financial stability and improve matching with the maturity terms of

the Company’s assets.

Carrying amounts and fair value of the debt in loans and bonds of the Company as of March 31,

2020 are detailed as follows.

Book value Fair value ThCh$ ThCh$

Loans 550,145,935 595,838,404

Bonds 1,823,362,012 2,047,762,901

Valuation technique: Discounted cash flows: The Level 2 valuation model considers the present

value of expected payment, discounted using a risk adjusted discount rate.

The following methodology is used to calculate the fair value:

Loans: Discounted cash flows of each credit using the LIBOR 180 days in US dollars at each

quarter-end, where the fair value is the addition of the present value of each credit.

Local bonds: Discounted cash flows of each bond using the valuation rates provided by Risk

America, where each bond is discounted at its related rate.

International bond: For such calculation the Company uses the rate reported by Bloomberg for

transactions performed as of the quarter-end.

77



Credit risk

The Company's credit risk refers to the exposure to possible losses due to a counterparty’s

breach of conditions stipulated in a contract or financial instrument. It considers both credit

granted to customers and financial assets in portfolio.

Accounts receivable

The risk of accounts receivable arising from the Company’s main business (passenger

transportation) is limited, since 81% of the Company's revenue is received daily in cash, whereas

the remaining 19% corresponds to income not related to the main business. However, as a result

of the effects of the Covid-19 pandemic, the above percentages may experience changes. Such

changes and their impact are being permanently monitored.

The maximum exposure to credit risk arises from trade receivables.

Trade and other receivables 03-31-2020 12-31-2019

ThCh$ ThCh$

Trade receivables, gross 11,878,637 10,521,935

Impairment of trade receivables (669,911) (653,886)

Trade receivables, net 11,208,726 9,868,049

Sales channel accounts receivable, net 2,515,862 3,783,958

Other receivables, net 2,305,463 2,437,997

Total 16,030,051 16,090,004

Other receivables relate mainly to leases of commercial stores, advertising and invoices

receivable with low delinquency under normal conditions. However, it is possible that the Covid-

19 pandemic may cause changes in delinquency levels. The Company is constantly monitoring

accounts receivables for any changes and for their financial impact.

Impairment of accounts receivable is determined using the legal reports issued by the

Company´s Legal Affairs Management, and considering the level of default of the receivable and

the judicial collection and non-judicial collection measures taken.

78



Analysis of accounts receivable based on age is detailed as follows:

Age of trade receivables, net 03-31-2020 12-31-2019

ThCh$ ThCh$

Less than 3 month 9,420,454 4,231,606

3 months to 1 year 1,439,872 5,113,450

More than 1 year 348,400 522,993

Total 11,208,726 9,868,049

Age of Sales channel accounts receivable, net 03-31-2020 12-31-2019

ThCh$ ThCh$

Less than 3 month 2,466,393 3,685,763

3 months to 1 year 8,276 71,664

More than 1 year 41,193 26,531

Total 2,515,862 3,783,958

Age of Other receivables, net 03-31-2020 12-31-2019

ThCh$ ThCh$

Less than 3 month 1,747,451 1,974,972

3 months to 1 year 558,012 463,025

Total 2,305,463 2,437,997

Financial assets

The level of exposure of financial assets to risk is established in the Company's financial

investment policy.

As of March 2020, the financial assets’ maturity schedule is as follows:

03-31-2020

Financial Assets Up to 1 year 1 to 5 years Over 5 years Total ThCh$ ThCh$ ThCh$ ThCh$

Cash and cash equivalents

Cash 1,122,743 - - 1,122,743

Term deposits 69,980,205 - - 69,980,205

Subtotal 71,102,948 - - 71,102,948

Other financial assets

Financial Investments 111,491,519 - - 111,491,519

Derivative transactions 6,913,670 49,194,485 - 56,108,155

Finance lease 395,442 524,276 1,581,611 2,501,329


Advertising receivables - 28,179,245 18,316,509 46,495,754


Subtotal 118,800,631 78,461,390 19,898,120 217,160,141

Total 189,903,579 78,461,390 19,898,120 288,263,089

79



At the close of 2019, the financial assets’ maturity schedule is as follows:

12-31-2019

Financial Assets Up to 1 year 1 to 5 years Over 5 years Total ThCh$ ThCh$ ThCh$ ThCh$

Cash and cash equivalents

Cash 4,761,726 - - 4,761,726

Term deposits 99,295,250 - - 99,295,250

Repurchase agreements 2,446,293 - - 2,446,293

Subtotal 106,503,269 - - 106,503,269

Other financial assets

Financial Investments 151,649,628 - - 151,649,628

Derivative transactions 4,601,090 12,080,632 - 16,681,722

Finance lease 236,840 418,836 1,500,363 2,156,039


Advertising receivables - 27,603,058 19,322,141 46,925,199


Subtotal 156,487,558 40,786,377 20,822,504 218,096,439

Total 262,990,827 40,786,377 20,822,504 324,599,708

The average period of maturity of financial investments as of March 31, 2020 is less than 90 days

and they are invested in banks authorized in Metro S.A.'s financial investment policy.

The above is due to the Company's financial investment policy, which focuses on reducing the

risks by diversifying the portfolio, and establishing maximum limits of investment per bank and

minimum risk ratings per issuer.

23.3 Capital risk management

Pursuant to capital management, the Company seeks to maintain an optimal capital structure

while reducing its cost and ensuring its long-term financial stability. At the same time, it complies

with its financial obligations and covenants established in the debt contracts.

Every year the Company, through the Extraordinary Shareholders' Meeting, capitalizes

Government contributions associated with the financing of its expansion projects.

The Company follows up on the capital structure through debt and equity ratios, which are

detailed below:

Index 03-31-2020 12-31-2019

Leverage (times) 0.99 0.86

Equity (MCh$) 2,667,808 2,848,212

80



23.4 Commodities risk

The Company's commodities risk factors include the supply of electric energy it requires for its

operation and the need for continuity of service, in case of possible supply interruptions. In this

respect, the Company has a supply system that allows it to decrease exposure in case of supply

interruption by having two points of direct connection to the National Electrical System, which

supply Lines 1, 2, 3, 5 and 6, as well as two points for supplying Line 4.

In addition it should be noted that the electric energy supply systems are redundant and in the

event either fails, there is always a back-up to ensure the Company maintains the energy supply

for normal network operation.

The operating control systems are designed with redundant criteria, i,e, they operate on stand-by.

Therefore in case of absence of one of the systems, the other begins operating immediately,

resulting in normal network operation.

In the case of Lines 1, 2, 3, 5 and 6, if there is an interruption in the National Electrical

Coordinator, the distribution company has defined replacement of the supply that feeds the civic

neighborhood of Santiago as a first priority, which allows the Metro network to have energy

almost immediately, since Metro is supplied by the same sources.

Currently, the power supply is provided by three companies: San Juan, El Pelicano and Enel.

The first two companies relate to wind and photovoltaic power generation, respectively, the

contracts of which were entered into on May 19, 2016, for 15 years and both supply 60% of

Metro’s energy through Non-Conventional Renewable Energies (NCRE). Likewise, Enel is a

distributor entity with which the Company entered into a contract on September 2015 for 40% of

power supply until December 2023.

On December 29, 2018 El Pelicano was sold, resulting in the change only of its majority

shareholder (Sunpower), generating no operating risks for Metro’s electrical supply.

81


24. Environment

Disbursements related to improvements and/or investments that directly or indirectly affect protection

of the environment, for the periods ended March 31, 2020 and 2019, are detailed as follows:

Project

Allocated to administration expenses

Allocated to property, plant and equipment

Expenditures

committed in the future

01-01-2020 01-01-2019 01-01-2020 01-01-2019 2020

03-31-2020 03-31-2019 03-31-2020 03-31-2019 Amount

ThCh$ ThCh$ ThCh$ ThCh$ ThCh$

Noises and vibrations 2,345 - 445,928 265,390 3,036,637

Waste treatment 37,363 6,427 1,437 2,862 1,248,996

Run-off water 35,724 31,883 - - 90,392

Environmental management - - 408,558 777,652 3,324,838

Monitoring of polluting parameters 164 - - - 7,793

Total 75,596 38,310 855,923 1,045,904 7,708,656

The aforementioned projects are currently in progress as of March 31, 2020.

25. Sanctions

During the periods 2020 and 2019, the Company and its Directors have not been sanctioned by the

Chilean Financial Market Commission or any other regulator.

26. Subsequent events

1. By means of letter No. 179 dated April 28, it was reported that the following were the main

agreements made at the 29th Ordinary Shareholders' Meeting of Metro S.A.: the Annual Report

and the Consolidated Financial Statements for the year 2019 were approved, as well as the non-

distribution of profits, the non-distribution of dividends, and the remuneration of the directors.

2. By means of letter No. 193 dated May 5, it was reported that Metro S.A. had successfully raised a

total of US$ 1.5 billion through a bond issue in the international market on May 4, 2020.

The above bonds were issued under Rule 144A and Regulation S of the Securities Act of the

United States of America on May 7, 2020.

Use of bond proceeds: The net bond proceeds will be allocated to financing the repurchase of

Metro's 2024 international bonds, to partial prepayment of existing debt, and for corporate

purposes in general.

Series Maturing in 2030: US$ 500,000,000

Series Maturing in 2050: US$ 1,000,000,000

Interest rate

Series Maturing in 2030: 3.65%

Series Maturing in 2050: 4.70%

82


3. In order to prevent the spread and contagion of the virus called Covid-19, the President of the

Republic decreed a State of Constitutional Exception for Catastrophe effective as of March 18,

2020 across the entire national territory, adopting a series of sanitary and economic measures

designed to overcome the pandemic, including, among others, restriction of movement of people

and the closing of borders, cancellation of educational activities and limitations in public events.

Since the first phase of this pandemic, Metro S.A. launched a Health Surveillance Program

administered by a team of certified Occupational Safety and Health (SST in Spanish)

professionals, which is applied to both Metro workers and contractors. This program allows early

identification, evaluation and control of people at risk for this disease, providing recommendations

to control the spread and the impact on the operation. The program includes preventive

lockdowns; health, prevention and self-care guidelines; and information on actions to be followed

under Chilean Ministry of Health protocols. On the other hand, contingency plans have been set in

place to maintain operational continuity, such as teleworking, having on site only the staff that is

needed for ensuring operation, and contractor personnel that are strictly necessary.

In financial terms, both the spread of the virus and the measures taken have had, and will continue

to have, an impact on Metro’s business. In particular, the above has led to a general slowdown in

the Chilean economy, causing a significant reduction in the number of passengers transported by

Metro in the first quarter of 2020 compared to the same period in 2019. In particular, since April

2020 there has been a significant drop in the amount of transported passengers, a situation that

Metro will continue to monitor during the rest of the year.

Between April 1, 2020 and the date of issuance of these financial statements, no other subsequent

events have occurred that would affect these financial statements.

Julio E, Pérez Silva General Accountant

Rubén Alvarado Vigar General Manager

Date post:	11-Mar-2021
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